Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.
Narrations are given at the end of each journal entry. Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.
The basic consideration(s) in distinction between capital and revenue expenditure is/are
"Treating a revenue expenditure as a capital expenditure" is an example of Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.
If an effect of an error is cancelled by the effect of some other error, it is commonly known as
If an effect of an error is cancelled by the effect of some other error, it is commonly known as Compensatory errors. A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero.