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Question
Select the most appropriate alternative from those given below:
Interest on loan taken is debited to ______ A/c.
Select the most appropriate alternative from those given below:
Interest on loan taken is debited to ______ A/c.
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Solution
The correct option is A Profit and Loss
Profit and Loss account is prepared to find out the net profit earned by the firm. All the indirect expenses are debited to the profit & loss account.
Interest on loan is an indirect expense and should be debited to the profit & loss account.
Profit and Loss account is prepared to find out the net profit earned by the firm. All the indirect expenses are debited to the profit & loss account.
Interest on loan is an indirect expense and should be debited to the profit & loss account.
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