Question

Why are current accounts of partners maintained in a firm 2?

Answer 1

$\huge\mathfrak{Answer:}$

Charging interest on drawings is a means of discouraging partners from withdrawing excessive amounts from the business. This will mean that the entries for the share of the residual profit will be a credit in the Appropriation Account (thus resulting in a nil balance) and debits in the partners' current accounts.

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Answer 2

Charging interest on drawings is a means of discouraging partners from withdrawing excessive amounts from the business. This will mean that the entries for the share of the residual profit will be a credit in the Appropriation Account (thus resulting in a nil balance) and debits in the partners' current accounts.


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