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Question related to partnership firm?

Yeah Mehta (Student ) (21 Points)

04 May 2020

Why partners capital is debited when interest on drawing is recieved?

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Asha Kanta Sharma (Manager - Finance & Accounts) (10524 Points)
Replied 04 May 2020

Interests on Drawings is an indirect income for an organization and is credited in the books of accounts. On the other hand since partners generally don't pay to the organization in the form of cash or bank against such interest income, their capital account is DEBITED and Interest on Drawings Credited with the said amount.

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