Question

QUESTION 2

Consider the following statements:
(a) The withdrawal of capital in cash by a partner must be recorded by debiting the drawings account of
the partner and by crediting the bank account of the partnership.
(b) The drawings of partners are expenses of the partnership which must be disclosed in the income
statement of the partnership.
(c) At the end of a financial year, the salary of a partner for the year is provided for by debiting the salary
account of the partner and by crediting the current account of the partner.
(d) At the end of a financial year, the salary account of a partner is closed off to the appropriation
account.
(e) Cash drawn by a partner during a financial year as his salary is recorded by debiting the drawings
account (or the current account if no drawings account was opened) of the partner and crediting the
bank account of the partnership.

Which one of the following alternatives represents the correct statements?
1. All of the above
2. (a), (b), (d) and (e)
3. (a), (c), (d) and (e)
4. (c), (d) and (f)

Answer 1

3) option is correct as

a) Withdrawl of capital from the partnership means capital is being taken out in form of cash so Drawings a/c is debited and cash a/c is credited

c) Salary to the partner is expense of business therefore salary expense a/c is debited whereas partners a/cs are credited

d) Appropriation a/c is made to show the distribution of profits among the partners where salary to partners is also provided.

e) cash withdrawn as a salary is consisdered as drawing of capital from account so same entry of drawings/Current a/c if drawings not available are made.