Interest on drawings is shown in the Profit & Loss Account on the: MCQ with Answer and Explanation

Question
Interest on drawings is shown in the Profit & Loss Account on the:
A. It is not shown in P&L A/c
B. Debit side
C. Both sides
D. Credit side
Answer: Option D
Solution (By JKSSB Mock Tests)
Interest on drawings is an income for the business, hence it is credited to the Profit and Loss Account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
The 'Related Party Disclosures' standard is:
A. AS 21
B. AS 18
C. AS 17
D. AS 19
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Correct Answer: Option B

Explanation:
AS 18 requires disclosure of transactions with related parties.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is NOT a function of financial management?
A. Disposing of surplus funds
B. Determining capital structure
C. Estimating capital requirements
D. Recording daily transactions
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Correct Answer: Option D

Explanation:
Recording daily transactions is a function of financial accounting, not financial management. Financial management focuses on planning, organizing, and controlling funds.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
In a manufacturing account, 'Prime Cost' includes:
A. Direct materials, direct labour, direct expenses
B. Selling overheads
C. Administration overheads
D. All factory overheads
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Correct Answer: Option A

Explanation:
Prime cost is the sum of all direct costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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