Royalty payable by lessee is transferred to

[amp_mcq option1=”Royalty A/c” option2=”Land Lord A/c” option3=”Profit & Loss A/c” option4=”Short workings A/c” correct=”option1″]

The correct answer is: A. Royalty A/c

Royalty is a payment made by a lessee to the lessor for the use of the lessor’s property. It is usually calculated as a percentage of the lessee’s gross revenue from the property. The royalty is recorded in the lessee’s accounts as an expense.

The other options are incorrect because:

• Option B: Land Lord A/c is the account where the lessor records the rent received from the lessee.
• Option C: Profit & Loss A/c is the account where the lessee records its net income or loss for the period.
• Option D: Short workings A/c is an account used to record the intermediate calculations made in preparing the financial statements.