Get Started
Start Free Mocks
CUETMOCK

Ace Your

CUET Preparation Today

Start Free Mocks
Home Questions HHJ9UDHUPX
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

Correct Journal entry for transferring interest on capital to Profit and Loss Appropriation Account is-

Options:

Profit and Loss Appropriation A/c Dr. To Interest on Capital A/c

Interest on Capital A/c Dr. To Partner's Capital/Current A/cs

Interest on Capital A/c Dr. To Profit and Loss Appropriation A/c

Partners Capital/Current A/c's Dr. To Interest on Capital A/c

Correct Answer:

Profit and Loss Appropriation A/c Dr. To Interest on Capital A/c

Explanation:

The correct answer is Option (1) → Profit and Loss Appropriation A/c Dr. To Interest on Capital A/c

Interest on Capital is an expense for the partnership firm and is considered an appropriation of profit. For transferring interest on capital to Profit and Loss Appropriation Account.

Profit and Loss Appropriation A/c Dr.

          To Interest on Capital A/c

CUET Questions