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If interest on capital is payable but capital account has debit balance why should the base be examined carefully?

Answer and explanation

Correct answer: Because debit balance shows amount recoverable from partner and not normal capital

Interest on capital is normally allowed on positive capital. If there is debit balance read the question terms and period carefully.

Related tags

Interest On CapitalDebit CapitalConceptCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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