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Treating Manager as Partner

Which of the ...

Question

Which of the following is credited to Partner`s capital account when capitals are fluctuating?

A

Drawings

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B

Interest on drawings

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C

Interest on capital

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D

Share of loss

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Solution

The correct option is C
Interest on capital

Interest on capital is credited to Partner`s capital account when capitals are fluctuating.

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Q. If interest on capital, salary to the partner and share of profit are credited while interest on drawings, drawings and share of loss are debited to the Partners' Capital Accounts, what is the method followed to maintain the Capital Accounts?

Q. 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 __________.

Q. When the Interest on capital is allowed to partners, Interest on Capital Account is debited and Partner's Capital Account is credited. It is called _____________.

A

B

are partners in a business and their capitals at the end of the year were

R s . 7, 00, 000

6, 00, 000

respectively. Calculate their opening capitals considering the following information:
(a) Drawings of

A

B

for the year were

R s . 75, 000

R s . 50, 000

respectively.
(b)

B

introduced capital of

R s .1, 00, 000

during the year.
(c) Interest on capital credited to the Capital Accounts of

A

B

R s .15, 000

R s . 10, 000

respectively.
(d) Interest on drawings debited to the Capital Accounts of

A

B

R s . 7, 500

R s . 5, 000

respectively.
(e) Share of loss debited to Capital Accounts was

R s . 20, 000

A

B

are partners in a business and their capitals at the end of the year were

R s . 7, 00, 000

R s 6, 00, 000

respectively. Calculate their opening capitals considering the following information:
(a) Drawings of

A

B

for the year were

R s . 75, 000

R s . 50, 000

respectively.
(b)

B

introduced capital of

R s .1, 00, 000

during the year.
(c) Interest on capital credited to the Capital Accounts of

A

B

R s .15, 000

R s . 10, 000

respectively.
(d) Interest on drawings debited to the Capital Accounts of

A

B

R s .7, 500

R s . 5, 000

respectively.
(e) Share of profit credited to Capital Accounts was

R s . 1, 00, 000

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