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Chapter: 12th Accountancy : Accounts of Partnership Firms Fundamentals

Accounts of Partnership Firms Fundamentals | Accountancy | Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Interest on drawings

Interest is charged on drawings made by the partners only when there is an agreement among the partners in this regard.

Interest on drawings

Interest is charged on drawings made by the partners only when there is an agreement among the partners in this regard. The rate of interest on drawings will be the rate agreed by the partners. Following are the journal entries to be made in the books of the partnership firm.

(a) For charging interest on drawings


Note: Interest on drawings is due from the partner to the firm and hence partner’s capital/ current account is debited and interest on drawings account is credited.

(b) For closing interest on drawings account



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Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail


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