#) Profit & Loss Account: Transaction of the partnership firm are recorded according to the Double Entry System of accounting.
*) So after making the Trading and Profit and Loss account of a Partnership firm the next step is to divide the profits or losses among the partners
*) To make other appropriations like interest on capital, salary, commission etc. For this purpose an another account is prepared i.e. profit and Loss appropriation account.
8) This account is prepared to show the division of profit and other appropriations among partners like salary, commission, interest on capital, interest on drawings etc.