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If A is to receive interest on capital of Rs 4,000 and salary of Rs 6,000, what is the total appropriation before distribution?

Answer and explanation

Correct answer: Ten thousand rupees

Total appropriation includes items payable to partners before sharing profits, such as interest on capital and salary. Here interest = Rs 4,000 and salary = Rs 6,000, so total appropriation = 4,000 + 6,000 = Rs 10,000. The closest distractors are C (only salary = Rs 6,000) and D (only interest = Rs 4,000), which omit one component and are therefore incorrect. Exam tip: Always list and sum all partner-specific appropriations first, then distribute the remaining profit.

Related tags

Interest On CapitalSalaryTotal AppropriationPartnership AccountsNumericalProfit DistributionPartnership Accounts Basic ConceptsAccountancy

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