Which statement is most correct for final checking in a profit distribution question?

Correct answer: Only remaining profit after all appropriations should be shared in ratio

The direct answer is option A: only the remaining profit after all proper appropriations should be shared in the agreed ratio. Profit distribution is done in an order. First identify the total profit. Then record valid appropriations, such as a partner’s salary, commission, or other items allowed by the deed. After these amounts are dealt with, the balance is the residual profit. That balance is distributed among partners in their profit-sharing ratio. Option A is correct because it describes this final checking rule. Option B, distributing the full total profit first, is wrong because it would ignore salaries, commissions, reserves, or other required adjustments and could distribute more than is available. Option C, treating interest on drawings as a debit, confuses the nature of the item: interest on drawings is generally income for the firm and is credited in the relevant profit-and-loss appropriation process, not treated as a deduction from distributable profit in this way. Option D, treating loan interest as an appropriation, is wrong because interest on a partner’s loan is a charge against profit before appropriation. The final ratio applies only after the correct accounting treatment. Exam cue: “adjust first, divide last.”