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Byju's Answer
Standard XII
Accountancy
Charge against Profits
Interest on c...
Question
Interest on capital is an appropriation of
.
A
drawings
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B
capital
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C
profit
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D
interest
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Solution
The correct option is
C
profit
Interest on capital is an appropriation of profits, i.e. the distribution of profits.
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Similar questions
Q.
Interest on capital is given from profit and loss appropriation account to a partner __________________.
Q.
A and B are partners having capital of Rs. 5,000 and Rs. 6,000 respectively. Interest on capital is given @ 5% p. a. Profits for the year before the appropriation is Rs. 4.600 provide interest on capital out of profits. Interest allocated to partners is:
Q.
Interest on capital is a/an ____________.
Q.
On
1
−
1
−
2015
balance in capital account of partner was Rs.
1
,
00
,
000
. He introduced certain amount on
1
−
5
−
2015
. As per partnership deed interest on capital is to be provided @
12
%
p.a. If Profit & Loss Appropriation A/c is debited for Rs.
18
,
000
as interest on capital, how much amount was introduced by the partner on
1
−
5
−
2015
?
Q.
A
and
B
are partners. A's Capital is
R
s
.
1
,
00
,
000
and B's Capital is
R
s
.
60
,
000
. Interest on capital is payable @ 6% p.a.
B
is entitled to a salary of
R
s
.
3
,
000
per month. Profit for the current year before interest and salary to B is
R
s
.
80
,
000
.
Prepare Profit and Loss Appropriation Account.
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