Partner Appropriations in Current Account

Steps:

• Identify interest on capital as a benefit: credit partner's current account to increase their share.
• Recognize salary as additional remuneration: credit partner's current account.
• Treat interest on drawings as a charge: debit partner's current account to reduce their share.

Why C is correct:

• Partnership accounting rules require appropriations like interest on capital and salary to be credited, and interest on drawings debited, to the partner's current account to track profit adjustments separately from capital.

Why the others are wrong:

• A: Incorrectly uses capital account for appropriations, which only records initial investments.
• B: Wrongly debits salary to capital account, mixing fixed capital with variable appropriations.
• D: Reverses credits and debits, treating benefits as charges and vice versa.

Final answer: C