Multiple choice

The partnership deed provides for a salary of Rs. 7000 per month to partner A. If A withdraws only Rs. 5000 in a month, the remaining Rs. 2000 is __________________________.

  1. Credited to profit and loss (adjustment) account

  2. Credited to the current account of partner a

  3. Credited to salary payable account

  4. Debited to his capital account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Salary due to a partner is an appropriation of profit. If the partner withdraws less than the salary, the remaining amount is credited to their current account as it represents an amount owed to them by the firm.

AI explanation

When a partner is entitled to a salary of 7000 per month but withdraws only 5000, the unpaid portion remains in the business as a capital claim. This remaining 2000 is transferred to the partner's account to reflect their accumulated capital or current account balance. Therefore, the amount is credited to the current account of partner A.

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