Question

The interest on drawings is an income of the partnership firm. (State True or False)

Answer 1

Hey mate ✌️✌️


TRUE,The interest on drawings is an income of the partnership firm.

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Answer 2

The statement of interest on drawings being an income of the partnership firm is a True.

• Drawing interest is a kind of fee charged to the partner for the amount that they have withdrawn from the company's money for their personal use. Therefore, it's the partner's cost and therefore the company's profits.
• Interest in the company's charged drawings only when stated in the Partnership Deed. It is calculated based on the period for which the money has been withdrawn.