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Question

At the year-end, the interest on drawings ____ the capital balance & the interest on capital ______ the capital balance.


A

Decreases & Increases

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B

Increases & Increases

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C

Increases & Decreases

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D

Decreases & Decreases

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Solution

The correct option is A

Decreases & Increases


At the year-end, the interest on drawings decreases the capital balance & the interest on capital increases the capital balance.


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