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Question
In the absence of any provision in the partnership deed, interest on a partner's loan/advance _________.
In the absence of any provision in the partnership deed, interest on a partner's loan/advance _________.
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Solution
The correct option is B will be allowed @ 6% p.a.
In the absence of any agreement interest on advances by a partner is allowed at 6 percent p.a. and is allowed whether there is profit or no. Interest on loan is a charge and will be provided regardless of profits earned.
In the absence of any agreement interest on advances by a partner is allowed at 6 percent p.a. and is allowed whether there is profit or no. Interest on loan is a charge and will be provided regardless of profits earned.
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