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If interest on loan is mistakenly treated as interest on capital what is the main error?

Answer and explanation

Correct answer: An expense will be treated as appropriation

Interest on loan is an expense before profit while interest on capital is profit appropriation. Both must be kept separate.

Related tags

Loan InterestInterest On CapitalErrorAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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