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If reserve was to be debited in appropriation account but was directly debited to partners capital accounts what is the main error?

Answer and explanation

Correct answer: Appropriation process was bypassed

Reserve is first created through Profit and Loss Appropriation Account. Direct debit to capital accounts misstates profit distribution presentation.

Related tags

ReserveErrorAppropriation AccountProfit DistributionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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