Advertisements
Advertisements
Question
State two differences between a partner’s loan account and a partner’s capital account.
Distinguish Between
Advertisements
Solution
| Basis | Partner’s Loan Account | Partner’s Capital Account |
| Nature | It is a liability for the firm. | It represents the partner’s ownership in the firm. |
| Interest | Interest is a charge against profits and is paid even if there is a loss. | Interest is an appropriation of profits and paid only out of profits. |
shaalaa.com
Is there an error in this question or solution?
