Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

Drawings of partner against capital is debited to which account of partnership firm:

Options:

Debited to drawings account of partner

Debited to capital account of partner

Both of these

None of these

Correct Answer:

Debited to capital account of partner

Explanation:

Drawings against capital by a partner is permanent withdrawal of capital. So, it is debited to capital account of partner to show reduction of capital and it is also not considered for calculating interest on drawings. It is considered for calculating interest on capital.