Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

When date of drawing is not mentioned, the interest on drawings are charged for how many months?

Options:

3

6

9

12

Correct Answer:

6

Explanation:

The correct answer is option 2- 6.

In such a case it is assumed that the amount is withdrawn evenly throughout the year and interest on drawings will be charged for the average period which is to be assumed as 6 months.
Interest on drawings = Total of drawings × Rate/100 × 6/12