Question

Interest on a partner's drawings is debited to the

A Partners current account and credited to the profit and loss appropriation account
B profit and loss appropriation account and credited to the partner's current account
C profit and loss account and credited to the partner's current account
D Partner's current account and credited to the profit and loss account

Answer 1

The correct answer is A. Partners current account and credited to the profit and loss appropriation account

Interest on a partner’s drawings is typically charged to the partner’s current account and credited to the profit and loss appropriation account. This is because the interest on drawings is an expense for the partner but an income for the firm.

So, the correct answer is A. Partners current account and credited to the profit and loss appropriation account.

Previous question Next question