Practicing Success
On which capital interest on partners' capital is allowed by a partnership firm? |
Opening capital Closing capital Average capital Capital for the period capital remains invested in the business. |
Capital for the period capital remains invested in the business. |
Interest on capital is allowed according to time for which the capital is invested in business. If it is withdrawn in between then it is calculated for the period for which capital remains invested in business, not for the full year. |