larryp

What are the reasons for Interest On Drawings?

Please eleborate what are the reasons for Interest On Drawings?

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beatryx

Drawings are opposite to capital invested i.e. these are the funds drawn by partners from the business. Therefore, in order to keep the distribution of profit fair, a clause may be inserted in the agreement, where an interest is charged on the drawings of the partners. Again, this can be on the total amount or on an amount exceeding a specific limit. Both of the above things depend upon the agreement between partners. Source:http://in.docsity.com/en-docs/Capital_and_Drawings-Financial_Accounting-Lecture_Handout_

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agrima

Sketching are the quantities via cash or perhaps goods which are recluse by the companions on the Company.Pastime with pictures will be incurred in a realistic pace because mutually silent with the partners and will also be included in the profit with the enterprise.Drawings together with attention on it will likely be deduced in the cash and you will be revealed evidently inside the Harmony Bed sheet"

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