While making an adjusting entry in respect of interest on capital, we credit __________________.

Interest on capital account

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Capital account

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Profit and loss account

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Drawing account

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Solution

The correct option is B Capital account
interest can be paid on the proprietor's funds/capital also. It is treated like any other expense and is debited to the Profit and Loss Account and credited to the capital Account.

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While making an adjusting entry in respect of interest on capital, we credit __________________.

The correct option is B Capital accountinterest can be paid on the proprietor's funds/capital also. It is treated like any other expense and is debited to the Profit and Loss Account and credited to the capital Account.

The correct option is B Capital account
interest can be paid on the proprietor's funds/capital also. It is treated like any other expense and is debited to the Profit and Loss Account and credited to the capital Account.