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The deed says interest on capital is debited to Profit and Loss Appropriation Account. Why is it debited?

Answer and explanation

Correct answer: Because it is distribution of profit to partners

Interest on capital is allowed to partners. Therefore it is debited to the Profit and Loss Appropriation Account.

Related tags

Interest On CapitalDebitAppropriationPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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