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Interest on capital Rs 12000 was omitted. How will partners balance appear?

Answer and explanation

Correct answer: Understated by Rs 12000

Interest on capital is a credit item payable to partner. Omitting it makes partners balance understated by Rs 12000.

Related tags

Interest On CapitalOmissionPartner BalanceAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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