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Interest on Drawings-Withdrawn in the Beginning of Every Month

In the absenc...

Question

In the absence of any provision in partnership deed, interest on capital ____________.

A

will not be allowed

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B

will be allowed @6%p.a.

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C

will be allowed only out of profit

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D

will be allowed even if there are no profits

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Solution

The correct option is A will not be allowed
In absence of any provision in partnership deed, interest on capital will not be allowed. In case there is no partnership deed or no information about interest on capital then interest is not provided. If there exits any information regarding interest, interest will be allowed only if there is profit.

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