Difference between Profit and Loss Account and Profit and Loss Appropriation Account Class 12

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Are you looking for the difference between profit and loss account and profit and loss appropriation account as given in accounting of partnership firm – Fundamentals class 12 Accountancy.

I have summed up difference and explained in detail.

The distinction between Profit and Loss Account and Profit and Loss Appropriation Account Class 12

Following are the differences between these two accounts.

BasisProfit & Loss AccountProfit & Loss Appropriation Account
1.Stage of PreparationIt is prepared after Trading Account. it starts with gross profit (in credit side) or gross loss (in debit side) as determined by trading account.It is prepared after Profit and Loss Account. It starts with net profit (in credit side) and net loss (in debit side) as determined by profit and loss account.
2.ObjectiveIt is prepared to ascertain net profit or net loss.It is prepared to distribute the net profit among partners.
3.Nature of ItemsExpenses debited to this account are a charge against profitsExpenses debited to this account are the appropriation of profits such as interest on capital, drawings, remuneration to partners, etc.
4.Partnership Deed or AgreementThis account is not prepared on the basis of the partnership agreement, except for interest on the loan from partnersThis account is prepared on the basis of the partnership Agreement.
5.Matching PrincipleThe matching principle (i.e., matching of revenue against expenses) is followed while preparing this account.The matching principle is not followed while preparing this account.
S.NTopics
1.Definition of Partnership
2.Features of Partnership
3.What are the Rights of Partners
4.What is Partnership Deed, Meaning, content
5.What are the Rules in the absence of a Partnership Deed
6.What are the Rules in the absence of Partnership Deed
7.What are the Liabilities of Partners
8.Profit and Loss Appropriation Account format, features
9.Journal Entries of Profit and Loss Appropriation A/c
10.Difference between Profit and Loss A/c and Profit and Loss Appropriation A/c
S.NTopics
11.Difference between charge against profit and appropriation of Profit
12.Treatment of Interest on loan by the firm to the partner
13.Treatment of Interest on loan by the Partner to the firm
14.Treatment of Rent paid to partner in partnership firm
15. Accounting Treatment of Managers commission in partnership
16.Items not shown in Profit and Loss Appropriation A/c
17.Methods of Maintaining Partners Capital A/c
18.Accounting Treatment When Appropriation is more than the Available Profit
19.Difference Between Fixed Capital A/c and Fluctuating Capital A/c
20.Difference Between Capital and Current A/c
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Anurag Pathak
Anurag Pathak

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