Question

Q 2. A partner withdraws 800 each on 1st April and
1st Oct. Interest on his drawings @6% p.a. on 31st
March will be:
b. 72
d. 96
a. 48
C. 24

Answer 1

Answer:

48, as 6 percent of 800 is rupees 48

Answer 2

A partner withdraws 800 each on 1st April and 1st Oct. Interest on his drawings @6% p.a. on 31st March will be a. 48.

• Interest may be charged by the business at a fixed rate when a business owner draws funds or assets.
• Journal entry for interest on drawings includes two accounts; Drawings A/C & Interest on Drawings A/C.

• The journal entry for the same is,

                    Drawing A/c Dr.       48

                              To cash A/c        48