Solution:

Calculation of Interest on Drawings

Step 1: Calculation of the Average Balance of Drawings
To calculate the average balance of drawings, we need to consider the period for which the drawings were made. Since partner A started withdrawing from 1st November, we need to consider the period from 1st November to 31st March (5 months).
Average balance of drawings = Total withdrawal / Number of months
= Rs 2400 / 5
= Rs 480

Step 2: Calculation of Interest on Drawings
Interest on drawings = Average balance of drawings x Rate of interest x Time
Time = 5/12 years (since the drawings were made for 5 months out of the 12-month accounting year)
Therefore, Interest on drawings = Rs 480 x 0.12 x 5/12
= Rs 24

Therefore, the interest on drawings at 12% p.a. is Rs 24.

Explanation of Accounting:

Accounting is the process of recording, classifying, summarizing, and interpreting financial transactions of a business. It involves the preparation of financial statements such as the balance sheet, income statement, and cash flow statement. The main objective of accounting is to provide useful information to stakeholders such as investors, creditors, and management to make informed decisions about the financial health of the business.

The accounting year of a business is usually 12 months, starting from the first day of a chosen month. This period is known as the financial year or fiscal year. During this period, all financial transactions of the business are recorded and summarized in the financial statements. These statements provide a snapshot of the financial performance and position of the business at the end of the accounting year.

One of the important aspects of accounting is the concept of double-entry bookkeeping. This means that every transaction has two aspects, a debit and a credit, which must be recorded in the books of accounts. The debit and credit entries must balance, ensuring that the accounting equation (Assets = Liabilities + Equity) is always maintained.

In conclusion, accounting plays a vital role in the management and growth of a business. It provides valuable information to stakeholders to make informed decisions, and helps in monitoring the financial health of the business.

5+1÷2=6÷2=3
2400×12÷100×3÷12=72