A. debited to appropriation account
B. credited to appropriation account
C. treated as an expense in profit and loss account
D. recorded in the balance sheet as current assets
Correct Answer:
Option B – treated as an expense in profit and loss account
Explanation
Charging interest on drawings is a means of discouraging partners from withdrawing excessive amounts from the business. From this, it follows that interest on drawings is a debit entry in the partners’ current accounts and a credit entry in the Appropriation Account.
Veterinary medicine is the branch of medicine that deals with the prevention, diagnosis, and treatment…
Anthropology is the scientific study of human beings and their cultures. It encompasses a wide…
Sociology is the scientific study of human society, culture, and behavior. It examines the social…
Social Work is a profession dedicated to helping individuals, families, and communities to cope with…
Religious studies is an academic discipline that explores the beliefs, practices, and history of various…
Public administration is the field of study and practice that focuses on the organization and…