Question : In the absence of a partnership deed, Interest on capital
Option 1: is allowed @ 6% p.a.
Option 2: is allowed @ 10% p.a.
Option 3: is allowed at the borrowing rate.
Option 4: is not allowed
Correct Answer: is not allowed
Solution : Answer = is not allowed. In the absence of a partnership deed, no interest is allowed to partners on capital. In the absence of a partnership deed specifying otherwise, interest on capital cannot be allowed because there is no agreed-upon provision for such compensation. Without a partnership agreement outlining terms, partners lack the framework to determine and allocate interest on capital. Hence, the correct option is 4.
Question : In the absence of a partnership deed, Interest on a loan of a partner is allowed.
Option 1: @ 6% p.a.
Option 2: @12% p.a.
Option 3: No interest is allowed
Option 4: @ 8% p.a.
Question : In the absence of a partnership agreement, interest on partners' drawings is charged:
Option 1: @ 8% p.a.
Option 2: @ 9% p.a.
Option 3: @12% p.a.
Option 4: No interest is charged.
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