The correct answer is: A. Preliminary expense
Interest on drawing is a preliminary expense because it is an expense that is incurred before the business starts operating. It is an expense that is paid to the owner of the business for the use of their money.
Preliminary expenses are expenses that are incurred before a business starts operating. They are usually one-time expenses, such as legal fees, accounting fees, and marketing costs. Preliminary expenses are not included in the cost of goods sold, but they are included in the income statement as an expense.
Capital profit is the profit that a business makes from the sale of its assets. It is calculated by subtracting the cost of the assets from the sale price of the assets. Capital profit is not included in the income statement, but it is included in the statement of changes in equity.
Profit is the difference between the revenue that a business generates and the expenses that it incurs. It is calculated by subtracting the expenses from the revenue. Profit is included in the income statement.
Loss is the opposite of profit. It is the difference between the expenses that a business incurs and the revenue that it generates. It is calculated by subtracting the revenue from the expenses. Loss is included in the income statement.