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Why should we prepare profit
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Answer Posted / kaptan bansal
The main purpose of preparing a Profit and Loss
Appropriation account is "Distribution of profits".
and P & L Appropriation is made to
show how the profits of companies have been appropriated (
To set apart for a specific use ).
For example - Net Profit transffered to General Reserve ,
proposed dividend etc.
These items show how the profit is assigned to different
purposes .
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