Question

Identify the journal entry for transferring interest on drawings to the Profit and Loss Appropriation A/c.

Options

• Partners' Capita/Current A/cs     Dr.
      To Interest on drawings A/c
  (Being interest on drawings transferred to Profit & Loss Appropriation A/c)

• Interest on Drawings A/c     Dr.
      To Partners' Capital/Current A/cs
  (Being interest on drawings transferred to Profit & Loss Appropriation A/c)

• Interest on Drawings A/c     Dr.
        To Profit and Loss Appropriation A/c
  (Being interest on drawings transferred to Profit & Loss Appropriation A/c)

• Profit & Loss Appropriation A/c    Dr.
     To Interest on Drawings A/c
  (Being interest on drawings transferred to Profit & Loss Appropriation A/c)

Answer 1

Interest on Drawings A/c     Dr.
      To Profit and Loss Appropriation A/c
(Being interest on drawings transferred to Profit & Loss Appropriation A/c)