Question

Which account is debited on repayment of Partner's Loan?

Options

• Partner's Loan A/c

• Partner's Capital A/c

• Both Partner's Loan A/c and Partner's Capital A/c.

• None of the above

Answer 1

Partner's Loan A/c

Explanation:

The balance sheet loan of a partner is not moved to the Realisation Account. In actuality, there is a separate account called Partner's Loan Account. Partner's Loan A/c is debited and Cash A/c is credited when partner's loan is repaid.