Match the following items.
| Column 1 | Column 2 |
| A) Partnership Deed | I) Nil |
| B) Profit sharing in absence of agreement | II) Written agreement |
| C) Interest on drawings in absence of agreement | III) 6% p.a. |
| D) Interest on partner's loan in absence of agreement | IV) Equal |
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- A-II, B- IV, C-I, D-III .
| Column 1 | Column 2 |
| A) Partnership Deed | II) Written agreement |
| B) Profit sharing in absence of agreement | IV) Equal |
| C) Interest on drawings in absence of agreement | I) Nil |
| D) Interest on partner's loan in absence of agreement | III) 6% p.a. |
* Partnership Deed- Partnership deed is a written legal document that contains an agreement made between two individuals who have the intention of doing business with each other and share profits and losses.
* Profit sharing in absence of agreement- Profits and losses are shared equally among the partners int he absence of any agreement.
* Interest On drawings- No interest is to be charged on the drawings made by the partners, if there is no mention in the Deed.
* Interest on partner's loan- If the Partnership Deed does not specify the rate of interest payable on loan by a partner, the rate at which interest on loan will be paid is 6 percent on any loan advanced by the partner to the firm. Interest on loan will be paid to the partners even if the firm incurs a loss.