Charge Interest of Rs 500 on drawings.
in profit and loss account where should it be put?
in debit or credit
Debit interest expense..
10 Replies
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 13 August 2023
Interest on drawings is income to the business and expense (loss) to proprietor will be debited to Capital account..
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 13 August 2023
The interest is Expense...
Debit in Interest Expenses &
Credit into Capital Account...
Debit in Interest Expenses &
Credit into Capital Account...
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 13 August 2023
Same thing in case of Partnership Firm , partners withdraw Goods or money ( Drawings ) from the Business , so as per partnership deed Business charge Interest on Drawing to partners , therefore Interest on Drawings is Income to the partnership Firm (Business ) and expense (loss ) to the partners .
Eswar Reddy S
(CFO- at NHTF)
(58270 Points)
Replied 13 August 2023
Is it proprietorship or partnership?
Proprietor need not pay interest on drawings since after tax profit completely belongs to proprietor
Proprietor need not pay interest on drawings since after tax profit completely belongs to proprietor
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 16 August 2023
Ok so partnership accounting has the henious form and legality. Why didn't they come into business combinations? Very funny!
Eswar Reddy S
(CFO- at NHTF)
(58270 Points)
Replied 16 August 2023
Check the initial query .
It says interest on drawings ?
It says interest on drawings ?
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 17 August 2023
Yes , agree with @ Eswar Reddy . please check initial query.
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