Question:
For the firm, interest on partner's drawing is a/an
For the firm, interest on partner's drawing is a/an
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Interest on drawings is considered income for the firm as it is charged on the capital withdrawn by the partners.
Updated On: Sep 1, 2025
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Correct Answer: 3
Solution and Explanation
Step 1: Concept of interest on drawings.
Interest on drawings refers to the amount paid by the partner to the firm for the use of capital withdrawn from the firm.
Step 2: Accounting treatment.
Interest on drawings is considered an income for the firm, as the firm earns it from the partner.
Step 3: Conclusion.
Thus, the correct answer is (C) Income. Final Answer: \[ \boxed{\text{Income}} \]
Interest on drawings refers to the amount paid by the partner to the firm for the use of capital withdrawn from the firm.
Step 2: Accounting treatment.
Interest on drawings is considered an income for the firm, as the firm earns it from the partner.
Step 3: Conclusion.
Thus, the correct answer is (C) Income. Final Answer: \[ \boxed{\text{Income}} \]
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Top Questions on Interest
- Explain any one method of calculation of interest on drawings.
- Radha and Rohit were partners in a firm. Radha withdrew a fixed amount at the beginning of every quarter for the year ended 31st March, 2024. Interest on drawings is charged at 12% p.a. Interest on Radha’s drawings was charged for .......... months.
Usha and Mohak were partners in a firm. Usha withdrew a fixed amount at the end of every half-year for the year ended 31st March, 2024. Interest on drawings is charged at 9% p.a. Interest on Usha’s drawings will be charged for months.
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A. Equal amount of drawings
B. Fixed interval of drawings
C. Varying amounts of drawings
D. Different interval of drawings
E. Rate of Interest
Choose the correct answer from the options given below:
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