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Home Questions ASBUPNMZEZ
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:
Assertion (A): Interest on capital to a partner is payable only out of profits.
Reason (R): Interest on capital is an appropriation of profits that is required to be provided irrespective of profits and loss.
Options:
Both A and R are true. R is the correct explanation of A.
Both A and R are true but R is not the correct explanation of A.
A is true but R is false.
Both A and R are false.
Correct Answer:
A is true but R is false.
Explanation:
Interest on capital is an appropriation and is provided when there is profit if no further information is given.

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