Day: September 20, 2022

A partnership maintains both capital and current accounts for its partners.

What is the correct accounting entry for recording interest on capital for partner X?

Select ONE answer:

1. account to be debited – Profit and Loss Appropriation & account to be credited – X’s Capital
2. account to be debited – Profit and Loss Appropriation & account to be credited – X’s Current
3. account to be debited – X’s Capital & account to be credited – Profit and Loss Appropriation
4. account to be debited – X’s Current & account to be credited – Profit and Loss Appropriation

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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