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CSEET · Fundamentals of Accounting · Partnership and LLP Accounts

Ramesh and Suresh have fixed capitals. At the year end, Ramesh's current account showed an opening credit of Rs 10,000. During the year it was credited with interest on capital Rs 30,000 and profit share Rs 45,000, and debited with drawings Rs 70,000 and interest on drawings Rs 3,000. What is the closing balance of his current account?

The closing balance is a credit of Rs 12,000. Credits total Rs 85,000 (opening Rs 10,000, interest Rs 30,000, profit Rs 45,000) and debits total Rs 73,000 (drawings Rs 70,000 plus interest on drawings Rs 3,000). The net is Rs 12,000 credit.

  1. ACredit Rs 12,000Correct
  2. BDebit Rs 12,000
  3. CCredit Rs 18,000
  4. DCredit Rs 15,000

Explanation

Credits: 10,000 + 30,000 + 45,000 = 85,000. Debits: 70,000 + 3,000 = 73,000. Balance = 85,000 - 73,000 = Rs 12,000 credit. Option C ignores interest on drawings.

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