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When is the Debit to partner's capital a/c entry passed in accounts?
4. When is the Debit to partner's capital a/c entry passed in accounts?
- Drawings are made
- Investment is done
- Interest on Drawings is charged
- Capital is withdrawn
Answer: C) Interest on Drawings is charged
Explanation:
At the point when the Interest on drawings is charged to accomplices, Interest on Drawing Account is credited, and the Partner's Capital Account is charged. It is called a changing section. Changing sections are normally done toward the year's end for wages and costs.