Correct Answer: Partnership firm

Solution : Answer = Partnership firm
The profit and loss appropriation account is an extension of the Profit and loss account. A profit and loss appropriation account is prepared to carry out adjustments to the partner's rights and obligations, like salary. The profit and loss appropriation account is prepared by a partnership firm to allocate net profits or losses among partners based on agreed-upon ratios, ensuring transparent distribution of financial outcomes.
Hence, the correct option is 2.