INTEREST ON PARTNERS CURRENT ACCOUNT AND INTEREST ON CAPITAL

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This discussion clarifies the correct accounting treatment for interest on partners' current accounts and capital. It confirms that annual interest can be charged on both, but advises calculating it on the net credit balance of both accounts combined. The conversation also addresses whether wages for tasks like filling bags and loading/unloading rice, along with factory electricity bills for motors, are direct or indirect expenses, confirming they are direct.

raghavendra b

raghavendra b (Querist)

29 May 2020 DEAR SIR,

INTEREST CHARGED @ 12% ON PARTNERS CURRENT ACCOUNT BALANCE AND INTEREST PAID TO PARTNERS CAPITAL @ 12% IS CORRECT WAY TO ACCOUNTING WE CAN CHARGE BOTH ANNUAL INTEREST ON EACH ACCOUNT.

REGARDS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 May 2020 Not correct way. Pay only 12% interest on net credit balance of both accounts.

raghavendra b

raghavendra b (Querist)

29 May 2020 thank you sir,

another one simple query sir, wages paid to labours for, fill rice into the bags, loading and unloading rice bags, including paddy cleaning etc and factory current bill using more than 1 hp motors ,these expenses are direct or indirect expenses.

please clarify me

regards

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 May 2020 These are direct expenses.

raghavendra b

raghavendra b (Querist)

29 May 2020 THANK YOU VERY MUCH SIR,

I AM GAINING KNOWLEDGE FROM YOUR ADVICE SIR,

REGARDS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 May 2020 Welcome.......................

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