Qualification > Commerce

Interest on loan

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cs:
I am doing a2 this year,

and while doing some past year papers(partnership topic), i noticed interest on loan is not credited in current account, i refer back to the textbook, some of them has interest on loan in current account, while some don't, why is it?

aparna.agrawal1995:
If the loan that the business takes is from the partners then the interest on loan would be credited to that particular partner from whom the loan is taken from and debited to the profit and loss. But if the business takes any other loan such as bank loan then the current accounts won't be credited in that case because partners have nothing to do with the loan.
Hope this helps. :)

cs:

--- Quote from: aparna.agrawal1995 on November 05, 2011, 04:59:10 am ---If the loan that the business takes is from the partners then the interest on loan would be credited to that particular partner from whom the loan is taken from and debited to the profit and loss. But if the business takes any other loan such as bank loan then the current accounts won't be credited in that case because partners have nothing to do with the loan.
Hope this helps. :)

--- End quote ---

this certainly helps a lot, thanks! didnt notice the difference :)

cs:
what about this one

cs:
and I have another question to ask,

for business purchase topic, if we are not told that the business take or does not take over the "bank", it means? no is it?

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