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Effective Ways to Find Everything on Interest on Drawings Homework Answers

Interest on drawings is interest earned on the amount taken as a loan by partners from capital account. Interest on drawings is income to a company while an expense to partners. Drawings can be through cash withdrawal or goods withdrawal. Drawings are also made against profit. There would be a partnership agreement for charging interest on drawings.

Two types of methods to calculate interest on drawings

Normally interest is calculated by an outstanding period for which money was used.

Interest on drawings =drawn amount *(rate of interest *100)*(months/12)

The second method is to multiply drawings with duration and is termed as product method

Interest on drawings =total product * (rate of interest *100) & (1/12)

Interest on drawings vs. interest on capital

Students may feel confused when interest on drawings and interest on capital terms are used together. Interest on drawings means a partner has withdrawn money from the capital account and partner should pay interest for it. A gain from company perspective. Interest on capital means that partner has invested money into company and company should pay interest on it. Why student may need online expert help

A student may not understand concept taught in class and may feel difficult to answer the interest on drawings homework answers. At that time student should seek the help of online experts who would guide them to complete an assignment.

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