Profit & Loss Appropriation Account divides the net profit among partners according to partnership deed. Structure: Begin with Net Profit from P&L Account; deduct partner allocations; residual profit allocated per profit-sharing ratio. Common Allocations: Partner Salaries (compensation for services): Debit Appropriation, Credit Partner's Capital/Current Account. Interest on Capital (return on investment): Debit Appropriation, Credit Partner's Capital/Current Account. Interest on Drawings (cost of withdrawals): Debit Partner's Capital/Current Account, Credit Appropriation (reduces net allocation). Bonus to Specific Partners (as per deed): Debit Appropriation, Credit Partner's Capital/Current Account. Profit Sharing: Remaining profit (after above deductions) allocated to partners in agreed ratio. Calculation: Net Profit - Salaries - Interest on Capital + Interest on Drawings - Bonuses = Balance for Profit Sharing. Balance allocated: Partner A: B:C in agreed ratio. Journal Entries: Allocate salaries, interest, bonus separately, Transfer profit share to respective capital/current accounts, Close appropriation account to capital/current accounts. Balance Sheet Presentation: Show allocated profit, Interest on capital, Bonuses as increases to partner equity. Verification: Total appropriations + Residual profit share = Net Profit (reconciles). Exam tip: Master the sequence of appropriations; practice calculating each component; understand the distinction between salary and profit share; ensure total allocations reconcile with net profit.