Which of the following are shown is profit and loss appropriation account? 1. Salary to staff 2. Salary to partners 3. Interest on capital 4. Fresh capital introduced 5. Share of profit 6. Amount of drawings 7. Interest on drawings Select the correct answer:

The correct answer is: D. 2, 3, 6, 7

A profit and loss appropriation account is a statement that shows how the net profit of a business has been divided among the partners. It is prepared after the profit and loss account has been prepared.

The following items are shown in a profit and loss appropriation account:

• Interest on capital: This is the amount of interest that is paid to the partners on their capital.
• Share of profit: This is the amount of profit that is allocated to each partner.
• Amount of drawings: This is the amount of money that each partner has withdrawn from the business during the year.
• Interest on drawings: This is the amount of interest that is charged to the partners on their drawings.

The following items are not shown in a profit and loss appropriation account:

• Salary to staff: This is an expense of the business and is shown in the profit and loss account.
• Fresh capital introduced: This is an increase in the capital of the business and is shown in the balance sheet.

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