In a partnership, when interest is paid on loan to the partner, is it an appropriation of profit or not?

February 28th, 2011 Comments off
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Earlier article described how a loan can occur in a partnership. 

Interest on loans from a partner is accounted for as an EXPENSE in the Profit & loss account and NOT as an appropriation of profit even though the interest is added to the current account of the partners.

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Financial Accounting

 
 

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