Interest on capital is ______ for a business concern.

Expense

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Income

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Asset

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Liability

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Solution

The correct option is C Expense
Interest on capital is a charge on the profits of a firm and it is debited to the P&L account to recognise as an expense (and a charge on the profits).

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Interest on capital is ______ for a business concern.

The correct option is C ExpenseInterest on capital is a charge on the profits of a firm and it is debited to the P&L account to recognise as an expense (and a charge on the profits).

The correct option is C Expense
Interest on capital is a charge on the profits of a firm and it is debited to the P&L account to recognise as an expense (and a charge on the profits).