Remuneration or Commission to Partners - Class 12 Partnership Accounts Fundamental

 Remuneration (Salary or Commission) to a partner is to be allowed if the partnership deed or agreement provides for it.
Remuneration (Salary or commission) to a partner being an appropriation of profit is transferred to the debit of the Profit and Loss Appropriation Account and not to the debit of the Profit and Loss Account.

Accounting Treatment

Any salary or commission paid to partners are appropriation of profit, hence transferred to Profit and Loss Appropriation Account.

Note: At the time of preparing Profit and Loss Appropriation Account it’s better to show individual partners name for Salary, Commission, etc.