Question

The interest on drawings is transferred to ________ side of partner's current account. (Fill in the blank by choosing correct option)
a) debit
b) credit
c) asset
d) liability

Answer 1

Heya user ✨✨

⏩The interest on drawing is transferred to debit side of partner current account .

Answer 2

The interest on drawings is transferred to debit side of partner's current account.

* It is because whenever any amount is withdrawn, interest is charged that gets deducted from the current account.

* It is mostly done to avoid frequent withdrawals in case of business as it affects the business in the long-term.

* It is added as a credit to the appropriation account.