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JAMB Principles of Accounts 2010 Question 42

Question 42

Partnership Accounts

The interest on partners' loan is

  1. A.debited in current account
  2. B.credited in profit and loss account
  3. C.debited in profit and loss account
  4. D.credited in current account.
Show the answer and explanation

Answer: C (debited in profit and loss account)

Explanation

Interest on a partner's loan is an expense of the firm, so it is debited in the profit and loss account.