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Interest on capital in

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why we record interest on capital in sole proprietorship in profit and loss account although interest on capital is appropriation of profit ??
Replies (6)

Incomes and expenses must be reported in the income statement. The profits are apportioned through profit sharing ratio. It is a business expense.

Can we prepare profit and loss appropriation in sole proprietorship firm??

No need. There are no partners and no need to distribute profits.

Agree with yasaswi
I also agree
Thank you


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