Multiple choice

Interest charged on drawings is Rs. 1,200. The correct entry is

  1. Capital A/c Dr 1,200
    To Interest on drawings a/c 1,200
  2. Drawings A/c Dr 1,200
    To Cash A/c 1,200
  3. Interest on drawings A/c Dr 1,200
    To Drawings A/c 1,200

  4. None of these
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A Correct answer
Explanation

Interest on drawings is an income for business, so it will be credited. And it will be charged from the capital account of partners, so Capital account will be credited.

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