Assertion: A, B, and C are partners in the firm. The partnership Deed Provided for salary to A of Rs 50,000 p.a. B and C also asks for salaries of Rs 50,000 each. Salaries to B and C are to be allowed.
Reasoning: In the absence of Partnership Deed, provisions of the Partnership Act, 1932 apply. Thus, salaries are not to be allowed to B and C.
Reasoning: In the absence of Partnership Deed, provisions of the Partnership Act, 1932 apply. Thus, salaries are not to be allowed to B and C.
Answer & explanation
Correct answer: option 4
In the absence of any agreement regarding salary in partnership deed, the provisions of partnership act 1932 are applied. As per the partnership deed, only A is allowed salary and therefore, no salary would be provided to partners B and C. hence, A is not true.
According to the Partnership Act 1932, the partners share profits equally, no partner is entitled to remuneration, no interest on capital is allowed and no interest on drawings is charged.