If a partner's personal income tax is recorded as a firm expense, what error will occur in the accounts?

Correct answer: Net profit will be wrongly reduced and the payment will not be shown separately as drawings

A partner’s personal income tax is a private expense, not a firm expense. Recording it as a firm expense overstates firm expenses and thus wrongly reduces net profit. Such payments should be posted as drawings (or debited to the partner’s capital/current account) and credited to cash/bank. The closest distractor (B) is incorrect because treating a partner’s personal tax as a firm expense does change net profit. Exam tip: always treat personal expenses paid by the firm as drawings and adjust partner accounts, not as firm operating expenses.