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JAMB Principles of Accounts 1994 Question 34

Question 34

Partnership Accounts

The major distinguishing element between the final accounts of a partnership and a sole trader is the

  1. A.drawings account
  2. B.appropriation account
  3. C.capital account
  4. D.creditors account.
Show the answer and explanation

Answer: B (appropriation account)

Explanation

A partnership needs a profit and loss appropriation account to share profit (salaries, interest, ratio) among partners; a sole trader takes all the profit.