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A interest on capital is six thousand rupees and interest on drawings is two thousand rupees. Both were wrongly debited. Compared with correct position how will capital be shown?

Answer and explanation

Correct answer: It will be understated by twelve thousand rupees

Interest on capital should have been credited but was debited so difference is twelve thousand. Interest on drawings debit is correct so total error is understatement by twelve thousand.

Related tags

Interest EntriesErrorCapital AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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