Concept:Interest on drawings is income for the partnership firm.
It is therefore credited to the Profit and Loss Appropriation Account and charged against the partner.
Explanation:When a partner withdraws money from the firm for personal use, the firm charges interest on the drawings.
This interest is a gain for the firm, so it is credited to the Profit and Loss Appropriation Account.
The partner is responsible for paying this interest, so it is debited to the partner’s current account.
Hence, the accounting entry is:
Debit: Partner’s current account
Credit: Profit and Loss Appropriation Account
This means interest on drawings is debited to partners’ current accounts and credited to the appropriation account.
Answer:A. partners current accounts and credited to the appropriation account