On which side is interest on drawings recorded in the partners account?

Correct answer: Debit side

Interest on drawings is charged because a partner uses firm money or goods for personal purposes during the accounting period. From the firm’s point of view, this amount is income receivable from the partner. From the partner’s point of view, it is an amount payable to the firm and therefore reduces the partner’s claim or balance in the account.

For this reason, interest on drawings is recorded on the debit side of the partner’s account. In the usual journal entry, the partner’s account is debited and the Interest on Drawings Account is credited. A credit entry would generally increase the partner’s claim, which is the opposite effect. Thus option A, the debit side, is correct.