Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

In case a partnership firm suffers loss, at what rate commission to partners will be allowed?

Options:

6%

10%

12%

Zero

Correct Answer:

Zero

Explanation:

The correct answer is option 4- Zero.

Commission to partners is generally allowed only out of profits, as it is treated as an appropriation of profit, not a charge against profit (unless otherwise stated in the partnership deed). In case of loss, no commission is allowed to partners unless the partnership deed specifically permits it even in the case of loss. If the partnership deed is silent, then no commission (i.e., 0%) is allowed to any partner when the firm incurs a loss.