CUET Preparation Today
When is interest on capital allowed in a partnership? |
Interest on capital is allowed only when the firm has incurred a net loss during the accounting year. Interest on capital is allowed only when the firm has earned a profit during the accounting year. Interest on capital is allowed regardless of whether the firm has earned a profit or incurred a net loss during the accounting year. Interest on capital is not allowed |
Interest on capital is allowed only when the firm has earned a profit during the accounting year. |
Interest on capital is allowed only when the firm has earned a profit during the accounting year. It is an appropriation of profit so profit and interest on capital are compared and if profit exceeds the interest on capital, then whole interest is provided otherwise appropriations are made in ratio of interest. |
