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Shashi and Trisha were partners with fixed capitals of ₹ 5,00,000 and ₹ 3,00,000 on 1st April 2024. Interest on drawings will be recorded ______. - Accounts

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Question

Shashi and Trisha were partners with fixed capitals of ₹ 5,00,000 and ₹ 3,00,000 on 1st April 2024. They are allowed interest on Capitals @ 6% p.a. and are charged interest on drawings @ 9% p.a.
During the year, Shashi withdrew ₹ 6,000 per month at the beginning of every month, whereas Trisha withdrew ₹ 18,000 per quarter at the beginning of every quarter.
The profits for the year before the above-mentioned adjustments were ₹ 1,20,440.

Interest on drawings will be recorded ______.

Options

  • On the debit side of the profit and loss appropriation account

  • On the credit side of current accounts

  • On the debit side of capital accounts

  • On the credit side of the profit and loss appropriation account

MCQ
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Solution

Interest on drawings will be recorded on the credit side of the profit and loss appropriation account.

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Chapter 1: Accounting for Partnership Firms - Fundamentals - CASE BASED MCQs - 4 [Page 1.52]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 1 Accounting for Partnership Firms - Fundamentals
CASE BASED MCQs - 4 | Q (e) | Page 1.52
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