The steps followed for calculating interest on drawing in the product method are.

(A) Calculate number of month for which interest is due on each drawing.

(B) List down amount of drawing in decending order in a table.

(C) Find the total of product and apply the formula to calculate interest on drawing.

(D) Calculate product for each drawing by multiplying amount and number of month.

Choose the correct answer from the options given below:

(B), (A), (D), (C)

The correct answer is option 3- (B), (A), (D), (C).

(B) List down amount of drawing in decending order in a table-  We begin by collecting and organizing all the drawings made during the year. 

(A) Calculate number of month for which interest is due on each drawing- We know the dates of each drawing, we calculate how long each amount has been used up to the end of the accounting year.

(D) Calculate product for each drawing by multiplying amount and number of month- Now, multiply each drawing amount by the number of months calculated.

(C) Find the total of product and apply the formula to calculate interest on drawing- With all individual products calculated, we total them and apply the formula to find total interest on drawings.

When the partners withdraw different amounts of money at different time intervals, the interest is calculated using the product method. Under the product method, for each withdrawal, the money withdrawn is multiplied by the period (usually expressed in months) for which it remained withdrawn during the financial year. The period is calculated from the date of the withdrawal to the last day of the accounting year. The products so calculated are totalled on the total of the products interest at the specified rate is calculated as under:
Total of products × Rate × 1/12