interest on capital is a .............entry in the statement of comprehensive income
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Interest on capital is an Adjusting entry in the statement of comprehensive income or Income statement.
Explanation:
- An income statement is a statement which refers to all the changes in equity of a firm that occurred in an accounting period which includes incomes such as net incomes and unrealized incomes.
The amount of interest on capital is considered an indirect expense for the business and it is considered an income for owner. Interest on Capital can be treated in two ways:
- Since we consider it as an expense for the business, it will be on the debit side of Profit and Loss Account.
- And as it is an income for the owner, it will be added in the partner's Capital Account or the Capital account in Balance Sheet.
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How will find the interest on capital in single entry system
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The interest on capital is an income of the firm. (State True or False)
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