How do treat Interest o loan on profit and loss appropriation account
Dear student profit and loss appropriation account is for the appropriations such as salaries, bonus and commissions etc. to the partners and not for any charges against profit. In case of any charges profit and loss account is prepared before the profit and loss appropriation account. There for interest on loan account will be treated as an expense in the profit and loss account on its debit side as the same is charge against profit. Regards