Question

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

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

(i) Guarantee by Firm to Partners.

(iv) Guarantee by Partner to Partner.