Question on: JAMB Accounting - 2022
The major distinguishing element between the final account of a partnership and that of a sole trader is the
A
drawing A/C
B
capital A/C
C
Creditor A/C
D
Appropriation A/C
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Correct Option: D
The major distinguishing element between the final accounts of a partnership and a sole trader is the Appropriation Account.
- Sole Trader: A sole trader's final accounts typically include a Profit and Loss Account and a Balance Sheet. The profit is directly transferred to the capital account.
- Partnership: In addition to the Profit and Loss Account and Balance Sheet, a partnership also includes an Appropriation Account. This account shows how the profit is distributed among the partners (e.g., salaries, interest on capital, and the remaining profit based on the profit-sharing ratio).
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