true

Take Class 12 Tuition from the Best Tutors

Affordable fees
1-1 or Group class
Flexible Timings
Verified Tutors

Search in

Flow chart for Provisions relating to Interest on Capital/ How to understand how much interest on Capital to take?

Madhura Sagar G.

05/05/2022 0 0

You have to undertake 3 step verification for identification of provisions relating to interest on capital:

1. Is Interest on capital a Charge in the question mentioned; YES- Take full amount of Interest on capital in the Profit and loss account.

Is Interest on capital a Charge in the question mentioned; NO- Go to the next verification step

2. Is the Partnership firm curently having Profit/Loss?; LOSS- Do not pay the interest on Capital

Is the Partnership firm curently having Profit/Loss?; PROFIT - Go to the next verification step

3. Are the Profits adequate to pay Interest on capital? YES- Pay the Interest on Capital

Are the Profits adequate to pay Interest on capital? NO- Pay the Interest on Capital in the ratio of Appropriations

0 Like 0 Dislike

Follow 1

Other Lessons for You

Introduction To Accounting: Part 15: Cost Concept Or Historical Cost Concept

According to the Cost Concept, an asset is recorded in the books of account at the price paid to acquire it and the cost is the basis for all subsequent accounting of the asset. Since the acquisition...

Nishant Kumar

0 0

Chapter 1 - Introduction to Accounting

History of Accounting : Before knowing the history of accounting, let us know about the history of money which is the basis of the accounting process. Money : Item or verifiable record accepted for...

Dhanalakshmi R.

1 0

Introduction To Partnership Firms

Fundamentals of partnership: A partnership comes into existence by an agreement. This agreement can be verbal or written. When two or more individuals enter into a partnership and sign a written agreement...

Srishti Agrawal

1 0

Why??????

Many times I have seen that students don't understand the basic accounting knowledge. Here I am not talking about the accounting principles or concepts. I am talking about the FUNDAMENTAL knowledge behind...

Nishant Katoch

0 1

Financial Accounting

Accounting is the art of recording, classifying, summarising in a significant manner regarding money, transaction & events which are at least in part financial interpreting the result thereof. (AICPA...

Rajeshwari M.

3 0

Find Class 12 Tuition near you

Looking for Class 12 Tuition ?

Learn from Best Tutors on UrbanPro.

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you

Class 12 Tuition Questions

Why are rules of debit and credit same for liability and capital?

5 Answers

What do you mean by principal of conservatism in accountancy?

47 Answers

What will be the effect of change in income on giffin goods and normal goods ?

7 Answers

What is matching concept in acvount?

11 Answers

difference b/w cash & cash eqivalant..

25 Answers

Looking for Class 12 Tuition Classes?

The best tutors for Class 12 Tuition Classes are on UrbanPro

Select the best Tutor
Book & Attend a Free Demo
Pay and start Learning

Take Class 12 Tuition with the Best Tutors

The best Tutors for Class 12 Tuition Classes are on UrbanPro

I am a Student I am a Tutor
Name*	Please enter your full name. Please enter institute name.
Email*	Please enter your email address.
Phone*	Please enter a valid phone number.
Location*	Please enter a pincode or area name.
City*	Please enter city name.
Category*	Please enter category.
Gender*	Male Female Please select your gender.
Email ID/ Mobile No.*	Please enter either mobile no. or email.
Enter Password*	Please enter OTP Please enter Password Sorry, this phone number is not verified, Please login with your email Id.