Accountancy Part AAccounting for Partnership

If Chirag withdrew ₹5000 per month in the middle of every month then…

Based on the following, answer the question:

Chirag and Jyoti are two partners in a firm sharing profits and losses equally. Chirag withdrew money for his personal use. As per the partnership deed, the rate of interest on drawings is 9% per annum.

If Chirag withdrew ₹5000 per month in the middle of every month then the Average period for interest charged on Drawing will be:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → 6 months

When a fixed amount is withdrawn in the middle of every month, the first drawing (mid-April) stays out for 11.5 months and the last (mid-March) for 0.5 month.

Average period = (11.5 + 0.5) ÷ 2 = 6 months

Interest on Chirag’s drawings = ₹5,000 × 12 × 9/100 × 6/12 = ₹2,700.

Option (1) 6.5 months — Incorrect. This applies when the money is withdrawn at the beginning of every month.

Option (3) 5.5 months — Incorrect. This applies when the money is withdrawn at the end of every month.

Option (4) 4.5 months — Incorrect. This applies to quarterly drawings made at the end of each quarter.

NCERT (2026-27 edition):
When Fixed Amounts was Withdrawn Every Month – “… Many a time, a fixed amount of money is withdrawn by the partners, at equal time interval, say each month or each quarter. While calculating the time period, attention must be paid to whether the fixed amount was withdrawn at the beginning (first day) of the month, middle of the month or at the end (last day) of the month. If withdrawn on the first day of every month, interest on total amount will be calculated for 6½ months; if withdrawn at the end at every month, it will be calculated for 5½ months, and if withdrawn during the middle of the month, it will be calculated for 6 months.”