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If interest on capital is credited to capital account and debited to Profit and Loss Appropriation Account what is the effect on partner account?

Answer and explanation

Correct answer: Partners claim increases

Credit in capital account increases partners claim. Debit in appropriation account shows distribution of firm profit.

Related tags

Interest On CapitalCapital AccountAppropriationCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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