Match List - I with List - II.List - I ||| List - II(A) Interest on loan ||| (I) Current Account(B) Fixed capital ||| (II) Charge Against Profit(C) Fluctuating capital ||| (III) Capital Account(D) Interest on capital ||| (IV) Appropriation of ProfitChoose the correct answer from the options given below :
- A(A) - (IV), (B) - (III), (C) - (I), (D) - (II)
- B(A) - (II), (B) - (I), (C) - (III), (D) - (IV)
- C(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
- D(A) - (II), (B) - (I), (C) - (IV), (D) - (III)
Solution & Step-by-step Explanation
(A) Interest on loan is an expense necessary to be paid even if there are losses, making it a Charge Against Profit (II).(B) Under Fixed capital method, all adjustments (salary, interest, drawings) are made in the Current Account (I).(C) Under Fluctuating capital method, all adjustments are made directly in the Capital Account (III).(D) Interest on capital is provided only out of profits, making it an Appropriation of Profit (IV).Correct match: A-II, B-I, C-III, D-IV.