The interest on the Capital Accounts of partners is credited to
A. Interest A/c
B. Partners Capital A/c
C. Profit and Loss A/c
D. Profit and Loss Appropriation A/c
Answer: Option B
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The interest on the Capital Accounts of partners is typically credited to the Partners Capital A/c.
B. Partners Capital A/c
Interest on the Capital Accounts represents the return on the partners' investments in the business. It is considered as a part of their capital contribution and therefore is credited to their respective Capital Accounts. By crediting the interest to the Partners Capital A/c, it increases their individual capital balances and reflects the growth of their investments due to the interest earned.
Therefore, the correct answer is B. Partners Capital A/c.