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The partnership deed says interest on capital is (8%) and interest on drawings is (10%). Which side is correct in profit and loss appropriation account?

Answer and explanation

Correct answer: Interest on capital debit and interest on drawings credit

Interest on capital is allowed to partners so it is debited. Interest on drawings is charged from partners so it is credited.

Related tags

PartnershipAdjustmentsAppropriation AccountPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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