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Which is the correct difference between interest on partner loan and interest on capital?

Answer and explanation

Correct answer: Interest on loan is expense and interest on capital is appropriation

Interest on partner loan is treated as expense before finding profit. Interest on capital is generally profit appropriation.

Related tags

Loan InterestInterest On CapitalDifferenceProfit DistributionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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