Question

State the Two Situations Under Which Interest on Capital Is Generally Provided.

Answer 1

The two situations under which interest on capital is generally provided are:

1. When the partner contributes unequal amounts of capital but shares profits.
2. When capital contribution is the same but the share of profits is unequal.

Also read:

• Interest on Capital
• Interest on Debentures
• Adjustment of Capitals

Stay connected with BYJU’S for more such questions and answers on various commerce topics.