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If interest on a partner’s loan is not paid, to which account is it generally added?

Answer and explanation

Correct answer: साथी का ऋण खाता (Partner’s Loan Account)

Interest due on a partner’s loan, when unpaid, is credited to the partner’s loan account. This increases the firm’s liability towards that partner. It is not added to the capital account because a partner’s loan is a liability separate from capital. Exam tip: unpaid interest on a partner’s loan increases the loan account balance.

Related tags

Partner Loan AccountUnpaid InterestPartnership AccountingPartner RetirementReconstitutionPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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