If interest on drawings is not credited in appropriation account by mistake how will distributable profit appear?

Correct answer: It will appear lower

Interest on drawings is a credit item in the Profit and Loss Appropriation Account because it is income for the firm. A credit increases the amount of profit available for distribution. If this credit is accidentally omitted, the calculation does not include an amount that should have increased the distributable profit.

Consequently, the profit shown as available for distribution will be lower than the correct amount by the omitted interest on drawings. For example, if ₹2,000 should have been credited but was omitted, the distributable profit would appear ₹2,000 too low. Therefore option A is correct. The omission does not make the profit zero and does not increase the shown amount.