Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

If the partnership deed is silent, at what rate, the interest would be charged on the drawings made by the partner:

Options:

0%

8%

12%

5%

Correct Answer:

0%

Explanation:

The correct answer is Option (1) → 0%

If the partnership deed is silent, then according to the Indian Partnership Act, 1932:

  • No interest is charged on drawings made by partners.

  • Interest on drawings can only be charged if it is specifically mentioned in the partnership deed.