In a partnership account, interest on drawings is

  • A debited to appropriation account
  • B credited to appropiation account
  • C treated as an expense in profit and loss account
  • D recorded in the balance sheet as current assets
jamb 2013accounting

The correct answer is B. credited to appropiation account

Charging interest on drawings is a means of discouraging partners from withdrawing excessive amounts from the business. From this, it follows that interest on drawings is a debit entry in the partners' current accounts and a credit entry in the Appropriation Account.

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