Out of which interest on capital will be

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Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

Out of which interest on capital will be paid to partners by a partnership firm if it is allowed in partnership deed?

Options:

Profits

Reserves

Goodwill

Accumulated profits

Correct Answer:

Profits

Explanation:

Interest on capital is provided out of profits only, if there is loss then it will not be provided.