Question

Choose the correct sequence of the following transactions in context of Division of Profits.

1. Guarantee given by the Firm to Partners.
2. Guarantee given by a Partners to the Firm.
3. Transfer of Profits to Profit and Loss Appropriation Account.
4. Guarantee given by a Partner to another Partner.

Options

• (i); (iii); (iv); (ii)

• (iii); (i); (ii); (iv)

• (iii); (ii); (i); (iv)

• (ii); (iii); (iv); (i)

Answer 1

(iii); (ii); (i); (iv)

Explanation:

(iii) Transfer of Profits to Profit and Loss Appropriation Account.

(ii) Guarantee given by a Partners to the Firm.

(i) Guarantee given by the Firm to Partners.

(iv) Guarantee given by a Partner to another Partner.