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Question
State whether the following statement are True or False.
The interest on drawings is an income of the partnership firm.
Options
True
False
Solution
True .
Explanation: Interest on drawings is a kind of fee charged from the partner on the amount withdrawn by him/her from the firm’s money for his/her personal use. So, it is an expense for the partner and accordingly, an income for the firm. Hence, the given statement is correct.
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