A, B and Care partners sharing profits in the ratio of 3 : 2 : 1. C died on 1st July, 2023. On this date, final accounts were prepared to ascertain profits for the period. It resulted in a profit of 1,75,000 to the firm. To give effect to the above:

The correct option is: Profit and Loss Account will be credited.

Step-by-Step Explanation:

1. Understanding the Scenario:
In this problem, partners A, B, and C share profits in the ratio of 3 : 2 : 1. A partner, C, dies on 1st July, 2023.
Typically, when a partner dies during an accounting year, their share of profit up to the date of death is calculated on an estimated basis, and the entry is passed by debiting the "Profit and Loss Suspense Account" and crediting the deceased partner's capital account.
However, in this specific case, the question states that final accounts were prepared to ascertain profits for the period up to the date of death (1st July, 2023). This means actual financial statements (Trading and Profit and Loss Account) were drawn up for this broken period rather than estimating the profit.

2. Accounting Treatment of Net Profit:
The preparation of these final accounts resulted in a net profit of 1,75,000 for the firm.
In standard accounting practice, the net profit arrived at the end of the period in the Profit and Loss Account is transferred to the Profit and Loss Appropriation Account for distribution among the partners.
To transfer this net profit from the Profit and Loss Account to the Profit and Loss Appropriation Account, the following closing journal entry is passed:
$$\text{Profit and Loss A/c} \text{Dr.} \mathrm{1,75,000}$$
$$\hspace{1em}\text{To Profit and Loss Appropriation A/c} \mathrm{1,75,000}$$
In this transfer entry, the Profit and Loss Account is debited, and the Profit and Loss Appropriation Account is credited.

3. Conclusion:
Looking at the options, we need to identify the effect on the respective account. As per the transfer entry shown above:
- Profit and Loss Account is debited to close it.
- Profit and Loss Appropriation Account is credited with the profit amount.
Thus, to give effect to the ascertained profit of the period, the Profit and Loss Appropriation Account will be credited (which means the Profit and Loss Account itself is debited, or looking from the perspective of the Appropriation Account, it receives credit from the Profit and Loss Account). Therefore, the correct option expressing this mechanism is that the Profit and Loss Appropriation Account will be credited, matching the provided correct option.