Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:
If the partnership deed is silent then interest on capital will be charged for:
Options:
1 month
6 months
1 year
No interest
Correct Answer:
No interest
Explanation:
No partner is entitled to claim any interest on the amount of capital contributed by him in the firm as a matter of right. However, interest can be allowed when it is expressly agreed to by the partners. Thus, no interest on capital is payable if the partnership deed is silent on the issue.