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Interest on… (Class 12 Accountancy SQP 2023-24, Q5)

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AccountancyCBSE Class 12 · Sample paper, session 2023-24 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2023-24: question 5

From the official CBSE sample question paper for 2023-24, section A, question 5, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q5 · 1 mark · MCQAccounting for Partnership: Basic Concepts

Interest on Partner's loan is credited to:

  1. (A)Partner's Fixed capital account.
  2. (B)Partner's Current account.
  3. (C)Partner's Loan Account.
  4. (D)Partner's Drawings Account.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Is the partner acting as an owner or a lender here?

Hint 2

Interest on a loan usually goes to the loan account itself.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Interest on a partner's loan is a charge against profit owed to the partner as a lender, not as an owner.

  2. It is credited to the Partner's Loan Account. Option (C).

    1 mark

Answer: (C) Partner's Loan Account.

Where the marks are

  • Credited to the loan account (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Accounting for Partnership: Basic Concepts, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.