If interest on drawings is wrongly credited to a partner's account, what will be the effect on the partner's account balance?

Correct answer: Partner's balance will appear higher

Interest on drawings should be charged to the partner — i.e., partner's current/capital account is debited and the interest is credited to income. If the interest is wrongly credited to the partner's account instead, the partner's balance will be increased incorrectly because a credit entry raises a normal credit balance. The closest distractor (option B) is wrong because the correct accounting entry (a debit) would reduce the partner's balance; the mistake here is the opposite. To rectify, reverse the incorrect credit and post the correct debit to the partner's account. Exam tip: always check the normal balance direction — interest charged to a partner is a debit to the partner's account and a credit to interest income.