Loan from Partners

Q.

Interest on loan by partners is to the profits of the firm.

1. Restricted

2. Either A or B

3. None of these

4. Not restricted

Q.

Interest on the loan is _______________

1. charge against profits

2. appropriation of profits

3. None of the above

4. Both (A) & (B)

Q. If interest on capital, salary to the partner and share of profit are credited while interest on drawings, drawings and share of loss are debited to the Partners' Capital Accounts, what is the method followed to maintain the Capital Accounts?

Q. If a firm prefers Partners Capital A/c be shown at the amount introduced by the partners capital in firm then entries for salary, interest, drawings, interest on capital and drawings and profits are made in ____________.

1. Trading A/c
2. Profit & Loss A/c
3. Balance Sheet
4. Partners Current A/c

Q. Interest on debentures is a charge against _____ and not an _____ ?

Q. Interest on loan by partners is a charge against profits.

1. False
2. True

Q. Interest on loan by partners is not restricted to the profits of the firm.

1. True
2. False

Q. Interest on capital is credited to Partner's Current Account. Name the method of maintaining Capital Account.