Question

Assertion (A): Commission provided to the partner is shown in the Profit and Loss A/c.

Reason (R): Commission provided to the partner is charge against profits and is to be provided at a fixed rate.

पर्याय

• (A) is correct but (R) is wrong.

• Both (A) and (R) are correct, but (R) is not the correct explanation of (A).

• Both (A) and (R) are incorrect.

• Both (A) and (R) are correct, and (R) is the correct explanation of (A).

Answer 1

Both (A) and (R) are incorrect.

Explanation:

Commission provided to a partner is not shown in the Profit and Loss Account because it is not a charge against profit. Instead, it is treated as an appropriation of profit and is therefore shown in the Profit and Loss Appropriation Account. Also, the reason is wrong because a commission to a partner is not a charge against profits and is not necessarily provided at a fixed rate; it is allowed only if specifically mentioned in the partnership deed. Thus, neither the statement nor the reason is correct.