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If the deed clearly provides interest on drawings, how will it be treated in accounts?

Answer and explanation

Correct answer: Income of the firm

Interest on drawings is charged from the partner, so it is income for the firm. In exams, it is added to profit.

Related tags

Interest On DrawingsFirm IncomePartner ChargePartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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