Question

Simi, Manu and Beena are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. The balances of their fixed capital accounts on 1st April, 2020, were Simi ₹ 1,00,000, Manu ₹ 1,00,000 and Beena ₹ 80,000.

After the accounts for the year ended 31st March, 2021, were prepared, it was discovered that interest on capital @ 10% per annum had been credited to the partner’s current accounts even though it was not provided in the partnership deed.

The error in Simi’s capital account/current account will be rectified by:

विकल्प

• Debiting her capital account with ₹ 1,200.

• Crediting her current account with ₹ 1,200.

• Debiting her current account with ₹ 1,200.

• Crediting her capital account with ₹1,200.

Answer 1

Crediting her current account with ₹ 1,200.

Explanation:

Particulars	Simi (₹)	Manu (₹)	Beena (₹)	Total (₹)
Interest on Capital Wrongly Credited	10,000	10,000	8,000	28,000
Profit to be Credited 2 : 2 : 1.	11,200	11,200	5,600	28,000
	(Cr.) 1,200	(Cr.) 1,200	(Dr.) 2,400	−