Partnership

Accounting

Easy

common

In case partner's capital is fixed, then where interest on drawings charged will be shown?

Debit side of partner's capital account

Credit side of partner's capital account

Debit side of partner's current account

Credit side of partner's current account

✅ Correct Option: 3

When the capital account is fixed, two separate accounts are maintained for each partner:

Capital Account - remains unchanged
Current Account - records all adjustments and transactions

Interest on drawings is a charge against the partner (the partner owes this amount to the firm). Since it reduces the partner's claim, it must be debited.

Under the fixed capital method, all such adjustments are recorded in the Current Account, not the Capital Account.

Journal Entry:

Partner's Current A/c ... Dr.

To Interest on Drawings A/c

This debit entry appears on the Debit side of Partner's Current Account.

Example for clarity:

If Partner A draws ₹10,000 and interest on drawings is ₹500:

Particulars	Amount (Dr.)	Amount (Cr.)
Partner A's Current A/c Dr.	500
To Interest on Drawings A/c		500

The ₹500 will be shown on the debit side of Partner A's Current Account, reducing the balance available to the partner.

Correct Option: 3

2025: 30 May Shift 2

Which of the following is not a features of partnership:

2023: 29 May Shift 2

In a partnership firm, partners share profit and loss in the ratio of 3:2. If the firm incurred a loss of Rs. 10,000 during the year then calculate the amount of loss to be shared by partners.

2026: 29 May Shift 2

Nancy, Sonu and Himani are partners sharing profits and losses in the ratio of 5:3:2. The partnership deed provides for charging interest on drawings @ 10%. The drawings of Nancy, Sonu and Himani during the year ending March 31, 2025 amounted to Rs.20,000, Rs.15,000 and Rs.10,000 respectively. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. Choose the correct adjusting entry.

2022: 15 July Shift 2

When the fixed amount is withdrawn at the end of each quarter, interest on drawing will be calculated for _______

2026: 29 May Shift 1

Capital employed in a business is Rs. 1,00,000. The normal rate of return on this type of business carried out is 10%. The firm has earned profits of Rs. 30,000; Rs. 36,000 and Rs. 42,000 in the last three years. Using capitalisation of super profits method, calculate the value of the goodwill of the firm.

2025: 14 May Shift 1

In case partner's capital is fixed, then where interest on drawings charged will be shown?

In case partner's capital is fixed, then where interest on drawings charged will be shown?

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