Question on: JAMB Accounting - 2022
Interest on a partner's drawings is debited to the
Partners current account and credited to the profit and loss appropriation account
profit and loss appropriation account and credited to the partner's current account
profit and loss account and credited to the partner's current account
Partner's current account and credited to the profit and loss account
Interest on a partner's drawings is a cost to the partnership and is typically debited to the profit and loss appropriation account.
Simultaneously, it is credited to the partner's current account to reflect the interest expense in the partner's individual account. This ensures that the partner's capital is appropriately adjusted to account for the interest charged on their drawings.
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