Match List I with List II

Choose the correct answer from the options given below :

A-IV, B-III, C-II, D-I

The correct answer is option 3-A-IV, B-III, C-II, D-I.

*Salary to partner- Salary is the amount paid to a partner as remuneration for their services to the partnership. It is treated as an expense of the firm and gain for the partner. So it is recorded on the credit side of current account of the partner.

*Interest on partner's loan- If a partner lends money to the partnership, the partnership may pay interest on that loan. This interest payment is an expense for the firm. The interest payment is charge against profit which has to be paid by the firm whether it earns profit or not. Any charge against profit is recorded on the debit side of profit and loss account.

*Interest on partner's drawings - When a partner withdraws funds from the partnership for personal use, the firm may charge interest on these drawings if it is mentioned in the partnership deed or agreed between partners. This interest on drawings is an expense for the partner and is debited to their current account.

*Additional capital introduced - If any partner brings more funds into the business, it increases their capital contribution. This increase in capital is recorded on the credit side of the Partner's Capital Account.