Appropriation account allocates partnership profits among partners only

Steps:

• Identify appropriation account purpose: divides net profit after P&L expenses, including partner-specific items like capital interest and salaries.
• Review choices: A, C, D relate to profit sharing adjustments for partners' contributions/drawings.
• Distinguish B: interest on partners' loans is a firm expense, not a profit allocation.
• Confirm: appropriation excludes external-like obligations such as loan interest.

Why B is correct:

• Per partnership accounting standards, interest on partners' loans is a deductible expense in the profit and loss account (finance cost), not the appropriation account which handles internal profit distribution.

Why the others are wrong:

• A: Interest on drawings is debited in appropriation to reduce partners' shares.
• C: Interest on capital is credited in appropriation as part of profit allocation.
• D: Salaries to partners are charged in appropriation before dividing remaining profit.

Final answer: B