Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

In which of the following case, the claim is valid if the partnership agreement is silent?

Options:

Sanjay is an active partner and wants a salary of ₹1,00,000 per year.

Monika had advanced a loan to the firm and claims interest @10% per annum.

Sanjay and Monika contributed 2,00,000 and 5,00,000 as capital respectively and Monika wants equal share.

Monika wants interest on capital to be credited @ 10% per annum.

Correct Answer:

Sanjay and Monika contributed 2,00,000 and 5,00,000 as capital respectively and Monika wants equal share.

Explanation:

When a partnership agreement does not address specific matters, the Indian Partnership Act, 1932, steps in to provide guidelines. According to this act, partners in the partnership evenly share profits, no partner is entitled to receive remuneration, capital does not accrue interest, and there are no charges for drawing funds. However, if a partner has lent money to the partnership, they are entitled to interest on that amount at a rate of 6% per annum.