why is interest on partner's loan debited to p&l appr. a/c?{this treatment has been done in icai cpt as well as ipcc module}
Because Interest is the expenses. and as per the one of the golden rule of accounting - All expenses should be debit and credit the all income.
So therefor Interest on Partners loan will debited to Profit and Loss account.
Thanks
Shankar
Interest is the expenses. so therefor it is debited to Profit and Loss account as per the golden rule of accounting.
one of the Golden Rule of accounting.
- All the expenses should be debited and all income should be credited.
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