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A and B share profits in the ratio 3:2. B was given excess interest on capital of ₹10000. Accounts are closed. What is the net correction?

Answer and explanation

Correct answer: Debit B ₹6000 and credit A ₹6000

Removing excess interest increases profit by ₹10000 and B gets back two fifth through profit share. Net burden on B is ₹6000.

Related tags

PartnershipError CorrectionExcess InterestAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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