Accounts of Partnership Firms Fundamentals | Accountancy - Interest on drawings | 12th Accountancy : Chapter 3 : Accounts of Partnership Firms Fundamentals
Chapter: 12th Accountancy : Chapter 3 : Accounts of Partnership Firms Fundamentals
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
Tags : Accounts of Partnership Firms Fundamentals | Accountancy , 12th Accountancy : Chapter 3 : Accounts of Partnership Firms Fundamentals
Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail
12th Accountancy : Chapter 3 : Accounts of Partnership Firms Fundamentals : Interest on drawings | Accounts of Partnership Firms Fundamentals | Accountancy
Related Topics
12th Accountancy : Chapter 3 : Accounts of Partnership Firms Fundamentals