Out of the following statements, which are correct?(A) In the absence…

Out of the following statements, which are correct?

(A) In the absence of partnership deed, no partner is entitled to get salary or other remuneration.

(B) If a partner withdraws fixed amount at the end of each month for the whole year, then interest on drawings will be calculated for an average period of 5.5 months.

(D) If a partner is admitted into a firm with a guarantee of certain profit, then the deficiency of profit (if any) shall be borne by the old partners in their capital ratio.

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A), (B) and (C) only

(A) In the absence of partnership deed, no partner is entitled to get salary or other remuneration. Correct. Where there is no deed, the Partnership Act applies, and under it no partner gets a salary or commission for taking part in the business.

(B) If a partner withdraws fixed amount at the end of each month for the whole year, then interest on drawings will be calculated for an average period of 5.5 months. Correct. The first withdrawal, at the end of April, is outstanding for 11 months and the last, at the end of March, for none.

Average period = (11 + 0) ÷ 2 = 5.5 months

(C) If the partnership deed provides for interest on capital but the firm does not have sufficient profit, then the interest on capital will be paid to the extent of available profit in the ratio of interest on capital. Correct. Interest on capital is an appropriation, so it is allowed only out of profits. When the profit falls short, the available profit is divided in the ratio of the interest due to each partner.

(D) If a partner is admitted into a firm with a guarantee of certain profit, then the deficiency of profit (if any) shall be borne by the old partners in their capital ratio. Incorrect. The deficiency is borne by the guaranteeing partners in the ratio in which they share profits (or in an agreed ratio), not in their capital ratio.

NCERT (2026-27 edition):
Provisions of Partnership Act Relevant for Accounting – “… (e) Remuneration for Firm’s Work: No partner is entitled to get salary or other remuneration for taking part in the conduct of the business of the firm unless there is a provision for the same in the Partnership Deed.”

NCERT (2026-27 edition):
Interest on Drawings – “… If withdrawn on the first day of every month, interest on total amount will be calculated for 6½ months; if withdrawn at the end at every month, it will be calculated for 5½ months, and if withdrawn during the middle of the month, it will be calculated for 6 months.”

NCERT (2026-27 edition):
Interest on Capital – “… As clarified earlier, the interest on capital is allowed only when the firm has earned profit during the accounting year. Hence, no interest will be allowed during the year the firm has incurred net loss and if in a year, the profit of the firm is less than the amount due to the partners as interest on capital, the payment of interest will be restricted to the amount of profits. In that case, the profit will be effectively distributed in the ratio of interest on capital of each partner.”

NCERT (2026-27 edition):
Guarantee of Profit to a Partner – “… The share of Kanishka works out to be Rs.5,000 short of the guaranteed amount. This shall be borne by the guaranteeing partners Madhulika and Rakshita in their profit sharing ratio, which in this case is 2:3, Madhulika’s share in the deficiency comes to Rs.2,000 (2/5 of Rs. 5,000), and that of Rakshita Rs.3,000.”