alleryStart learning →A partner's current account is credited with:
ADrawings made during the year
BInterest charged on drawings
CInterest on capital and salary
DThe partner's share of any loss
Answer & Solution
Correct answer: C. Interest on capital and salary
1. The current account records everything between the partner and the firm other than capital introduced or withdrawn.
2. It is credited with amounts the firm owes the partner: interest on capital, salary or commission, and the share of profit.
3. It is debited with amounts the partner owes the firm: drawings, interest on drawings and the share of loss.
4. A credit balance is therefore due to the partner and appears on the liabilities side of the balance sheet.
5. A debit balance is due from the partner and appears on the assets side.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 3 "Accounts of Partnership Firms - Fundamentals", §3.6.1_
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