Partnership Appropriation Account Items

Steps:

• Identify the appropriation account's purpose: it allocates net profit to partners via items like interest, salaries, and profit shares.
• Review options: determine if each relates to profit division or other partnership records.
• Eliminate non-appropriation items: capital changes, drawings, and external expenses go elsewhere.
• Confirm partner-specific allocations: only those dividing profit appear here.

Why C is correct:

• Partner salaries are appropriations of profit, recorded in the appropriation account per partnership accounting standards to equitably divide earnings before final profit sharing.

Why the others are wrong:

• A: Capital contributions increase partners' capital accounts, not appropriations.
• B: Drawings reduce capital directly and are recorded separately from profit allocation.
• D: Salary to M's sister is a business expense in the profit and loss account, not a partner appropriation.

Final answer: C