Question

4 on which side interest on partners drawing will be recorded when their capital are fixed

Answer 1

$\mathbb\purple{Question:-}$

On which side interest on drawings of partners will be recorded when their capitals are fixed

$\mathbb\pink{AnSwEr:-}$

:- Interest on partner's drawings are recorded in debit side of current a/c.

$\rm\blue{ \: fixed \: capital \: method \:}$

Under fixed capital method 2 a/c's the capital a/c and current a/c are maintained for each partner.The capital a/c is credited with the original capital contribution of the partner. It is also credited with additional capital contribution of the partner. It is debited with the permanent withdrawal made by partner out of the capital.

In the absence of any agreement to the contrary , capital accounts of partners should be maintained under fluctuating capital method.