Interest on capital in

30 October 2021

why we record interest on capital in sole proprietorship in profit and loss account although interest on capital is appropriation of profit ??

Reply
Follow
Share

6 Replies

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 30 October 2021

Incomes and expenses must be reported in the income statement. The profits are apportioned through profit sharing ratio. It is a business expense.

Atharv Sankliya (1356 Points)
Replied 30 October 2021

Can we prepare profit and loss appropriation in sole proprietorship firm??

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 30 October 2021

No need. There are no partners and no need to distribute profits.

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 31 October 2021

Agree with yasaswi

CA Aakarsh Jain (CA) (10431 Points)
Replied 01 November 2021

I also agree

CA. Sourav Sarkar (Chartered Accountant ) (24583 Points)
Replied 02 November 2021

Thank you

Start a New Discussion