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A interest on capital is five thousand rupees and interest on drawings is three thousand rupees. Both were wrongly credited. Compared with correct position how much will balance be overstated?

Answer and explanation

Correct answer: Six thousand rupees

Credit of interest on capital is correct but interest on drawings should be debited. Crediting it creates double difference of six thousand rupees.

Related tags

Interest On DrawingsErrorOverstatementCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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