Class 12 Accountancy Notes · GSEB

Interest on Drawings

Interest on Drawings — Master the 78/66 month rule and solve every 3-mark drawings sum of the GSEB Class 12 Accountancy board exam. GSEB Class 12 Commerce Accountancy notes with worked sums and a live solver.

Last updated: 27 Sep 2026

Notes

What This Sum Asks

Drawings are the cash or goods a partner withdraws from the firm for personal use. The question gives the withdrawal amount (stated monthly or as an annual total) and the rate of interest p.a. — you must find the annual drawings and the interest on drawings. This is a standard 3-mark board sum.

Two wordings decide the method: “beginning of every month” → 78 interest-months; “end of every month” → 66 interest-months. ⭐ Only these two cases are expected.

Steps to Solve

Interest on Drawings

I = \frac{PRN}{100}

I = Interest · P = Principal (monthly drawings) · R = Rate of interest p.a. · N = Number of years of interest.

Month-count derivation of N
Month	Beginning of every month (interest months)	End of every month (interest months)
1	12	11
2	11	10
3	10	9
4	9	8
5	8	7
6	7	6
7	6	5
8	5	4
9	4	3
10	3	2
11	2	1
12	1	0
Total	78	66

Drawings at the beginning of every month → N = 78/12 years.

Drawings at the end of every month → N = 66/12 years.

Annual drawings = monthly drawings × 12 (and reverse: monthly = annual ÷ 12).

Textbook note: problems on drawings in the beginning or at the end of the month are expected — no other computations are expected.

Read the wording twice

“beginning of every month” → 78; “end of every month” → 66. If only the annual total is given (e.g. ₹ 12,000), divide first: monthly drawings = 12,000 ÷ 12 = ₹ 1,000.

Interactive Problem Solver

Enter your own drawings, timing and rate — the solver walks the exact exam-order procedure: monthly drawings → choose N → substitute in I = PRN/100 → answers.

Drawings Interest Solver — I = PRN/100

12-month strip — interest-months counted

Σ = —

Each cell = one withdrawal · the number below it = interest-months that withdrawal carries · drawn at the start of every month

Work through steps 1–4 in order — the same four steps you will write in the exam.

Worked Board Sums

Type 1 — Withdraws: Board Sums

4 problems

Annual drawings ₹ 6,000; Interest on drawings ₹ 325

Annual drawings = 500 × 12 = ₹ 6,000
Beginning of month → N = 78/12 years
I = P × R/100 × N = 500 × 10/100 × 78/12 = ₹ 325

Textbook Illustration 1 — same as the solver default.

Interest on drawings ₹ 660

Monthly drawings = 12,000 ÷ 12 = ₹ 1,000
End of month → N = 66/12 years
I = 1,000 × 12/100 × 66/12 = ₹ 660

Interest ₹ 1,300; Annual drawings ₹ 24,000

Annual drawings = 2,000 × 12 = ₹ 24,000
Beginning → N = 78/12
I = 2,000 × 10/100 × 78/12 = ₹ 1,300

Difference in interest = ₹ 192

Ramesh (beginning): I = 1,600 × 12/100 × 78/12 = ₹ 1,248
Suresh (end): I = 1,600 × 12/100 × 66/12 = ₹ 1,056
Difference = 1,248 − 1,056 = ₹ 192

Shortcut: same amount & rate → difference = P × R/100 × (78−66)/12 = 1,600 × 12/100 × 1 = ₹ 192.

Key Takeaways

I = PRN/100 — P is the monthly drawing, N is in years.
Beginning of every month → N = 78/12; end of every month → N = 66/12. ⭐ These two cases only.
Annual drawings = monthly × 12; if annual is given, divide by 12 first.
Interest on drawings is an expense for the partner and income for the firm (credit of P&L Appropriation A/c).
Same amount drawn earlier always costs more interest — the beginning-vs-end gap = P × R/100 × 1 year-month.