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Received Incometax Rs. 3500 is debited to capital account (rectification of errors) |
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Answer» ong>Explanation: Income TAX PAID by the proprietor is on the personal income of the proprietor as business do not have income. It is not a expenditure of the firm. It is a form of DRAWING by the proprietor and is deducted from the CAPITAL of the firm as it leads to outflow of proprietor's capital fund from the business. |
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