Post Utme Ui 2021 Accounting Question 32

Practice objective / multiple choice question 32 from the 2021 Post Utme Ui Accounting examination.

Post Utme Ui 2021 Accounting Objective / Multiple Choice
Question 32 POST_UTME_UI • 2021 • ACCOUNTING • objective

In a partnership account, the capital of a partner who withdraws cash from the business is debited with the amount withdrawn. However, if the partner's capital is not sufficient to cover the withdrawal, the deficiency is treated as a loan from the partner. What is the correct treatment of the loan?

Answer Options

Correct Answer A. The loan is treated as a current liability and is shown on the balance sheet.
B. The loan is treated as a non-current liability and is shown on the balance sheet.
C. The loan is treated as a capital account and is shown on the balance sheet.
D. The loan is treated as a drawing account and is shown on the balance sheet.
Correct Answer
A
Correct Option:
The loan is treated as a current liability and is shown on the balance sheet.

About This Question

This is Post Utme Ui 2021 Accounting Question 32. It is one of the objective questions from the 2021 Post Utme Ui Accounting examination.

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