If any loan or advance is provided by partner then balance of such Loan Account should be transferre...........

If any loan or advance is provided by partner then, balance of such Loan Account should be transferred to :

B/S Assets side

B/S Liability Side

Partner’s Capital A/c

Partner’s Current A/c

- When a partner provides a loan to the partnership, it is treated as a liability on the balance sheet.

- This is because the partnership owes the amount back to the partner.

- Option 2: B/S Liability Side is correct, as the loan represents an obligation of the partnership.

- Option 1: B/S Assets Side would be incorrect because assets represent resources owned by the partnership, not obligations.

- Option 3: Partner’s Capital A/c is used for equity, not debt or loans; hence, it's unsuitable for recording a loan.

- Option 4: Partner’s Current A/c is typically used for ongoing partner transactions, not for recording loans.

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