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Accounting treatment

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Accounting treatment with respect to Loans and advances extended by partners to the Firm/Co.
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As per fundamental accounting concept, the accounting treatment shall follow is on mercantile basis, the interest on loans &advanced recorded as per accrual basis, and shown as a outstanding interest on loan, under current asset.

Loans and advances are general descripttions of debt obligations companies owe and must show on their balance sheet as part of total liabilities. Formal contracted loans are typically designed as "notes payable" on a balance sheet, whereas advances or purchases on credit are recorded as accounts payable.


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