Question

Interest on Loan is shown in the
(A)Departmental Trading A/C
B)Departmental P&L A/C
(C)General P& L A/C
(D)None of these​

Answer 1

Explanation:

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Answer 2

Interest on the Loan is shown on the debit side of the Profit and Loss Account.

• A Departmental Trading and Profit and Loss Account is opened for each individual department in a columnar form together with a separate column for 'Total' in order to ascertain the individual result of the different departments and also as a whole.
• The Departmental Trading Account shows the Gross Profit or Loss and the Departmental Profit and Loss Account shows the Net Profit or Loss earned or suffered by each department.
• Profit & Loss Statement/Account shows the profits/losses earned/incurred by a business for a month or a year.
• Interest on a loan is the interest paid by someone on a loan they might have taken at the pre-determined interest rate.
• It is an expense and thus, shown on the debit side of a Profit and Loss A/C or P & L A/C.
• Thus, interest on the Loan is shown on the debit side of the Profit and Loss Account.

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