Question

An interest on capital is an expenditure of the partnership firm. (State True or False)

Answer 1

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TRUE,An interest on capital is an expenditure of the partnership firm.


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Answer 2

It is true that an interest on capital is an expenditure of the partnership firm

Explanation:

• The interest on capital is an expense of a firm so it is an expenditure of the partnership firm.
• It is debited in the profit and loss appropriation accounts of the partnership concern.
• For the calculation of interest of capital for every partner account on the basis of the opening capital of the partners with the period wise are used by simple formula includes amount, rate and months by the rate of interest.