CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

When the Interest on drawings is charged to partners, Interest on Drawing Account is credited, and Partner's Capital Account is debited. It is called __________.

A
an opening entry
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
a closing entry
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
an adjusting entry
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
an transfer entry
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C an adjusting entry
When the Interest on drawings is charged to partners, Interest on Drawing Account is credited, and Partner's Capital Account is debited. It is called as an adjusting entry. Adjusting entries are usually done at the end of the year for incomes and expenses.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Sources of Finance I
BUSINESS STUDIES
Watch in App
Join BYJU'S Learning Program
CrossIcon