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A and B share profits in the ratio 1:3. Interest on B's drawings of ₹8000 was omitted and profit was already distributed. What is the net correction?

Answer and explanation

Correct answer: Debit B ₹2000 and credit A ₹2000

Interest must be recovered from B but increased profit would give B back three fourth. Net burden on B is ₹2000.

Related tags

PartnershipPast AdjustmentInterest On DrawingsAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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