Question

is withrawal from capital considered as drawings while calculating interest on drawings ?

Answer 1

Hello,
The Withdrawal of Capital and drawing are two separate things.
The withdrawal of capital is only shown in Partner's capital account in case fixed capital method. This means the Capital account of the partner will continue to show same balance every year until and unless some fresh capital has been introduced or something has been withdrawn out of capital. And the drawing reflected in Partner's Current account are the withdrawal of money or goods by the partner for personal use. This is reflected in current account. This is not the reduction in capital of partner.
As far as interest is concerned, it is to be charged as per the partnership deed.
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