The interest on drawings is an income of the firm. (State True or False)
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TRUE,The interest on drawings is an income of the firm.
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TRUE,The interest on drawings is an income of the firm.
✨ Hope this helps you ✨
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The statement of interest on drawings being an income of the firm is True.
- While interest on drawings is the company's income, it is the owner's expense.
- Since all transactions are recorded from a business perspective, interest on drawings is recorded on the Profit and Loss Account's credit side.
- Interest in the company's charged drawings only when it is stated in the Partnership Deed. It is calculated based on the period for which the money has been withdrawn.
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