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Recording Interest on Capital & Drawings

Which of the ...

Question

Which of the following account will be credited, when the interest on drawings is charged?

A

Asset account

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B

Interest on drawings account

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C

Partner's / Proprietor's capital account

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D

Profit & loss account

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Solution

The correct option is B
Interest on drawings account

The correct adjusting entry is:

Drawings A/c Dr

To Interest on Drawings A/c

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Which of the following account will be credited when the interest on drawings is charged?

Which of the following account will be credited, when interest on capital is charged?

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