Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 26 - No. 13)
In a partnership, what typically happens to interest paid on a partner's loan?
It is credited to the partner's capital account.
It is a deduction from the partnership's profit before profit sharing.
It is an allocation of profits.
It is debited to the partner's drawings account.
Explanation
Interest on a partner's loan is treated as an expense by the partnership.
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