Question

is the amount of interest on drawings for Ram, if his drawings during the year were Rs 24,000 & interest is chargeable at 10% p.a.

• A. Rs. 1,200
• B. Rs. 700
• C. Rs. 900
• D. Rs 1,500

Answer 1

The correct option is A Rs. 1,200

If drawings for the year has been given without any break up of the same, the interest on drawings shall be calculated for six months.
So, Interest on drawings
= Rs. 24,000 * $\frac{6}{12}$ * 10%
= Rs. 1,200