In a partnership account, interest on drawings is
- debited to appropriation account
-
credited to appropiation account
- treated as an expense in profit and loss account
- recorded in the balance sheet as current assets
The correct answer is: B
Explanation
Charging interest on drawings is a means of discouraging partners from withdrawing excessive amounts from the business. From this, it follows that interest on drawings is a debit entry in the partners' current accounts and a credit entry in the Appropriation Account.