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easyMCQCUET Accountancy 2025 2 June Shift 22026CUET Accountancy
1 mark

In case of a Fixed Capital Account framework, Interest on Drawings is:

  1. A
    Debited to capital account.
  2. B
    Credited to capital accounts.
  3. C
    Debited to current account.
  4. D
    Credited to current account.

Solution & Step-by-step Explanation

Under the fixed capital method, the balance in the Partner's Capital Account remains constant unless additional capital is introduced or permanent withdrawal of capital occurs. All regular adjustments, such as interest on drawings, salary, and profit shares, are routed through the Partner's Current Account. Since interest on drawings reduces the partner's equity balance, it is debited to the Partner's Current Account.

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In case of a Fixed Capital Account framework, Interest on Drawings is:
A
Debited to capital account.
B
Credited to capital accounts.
C
Debited to current account.
D
Credited to current account.

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