Accountancy Part AAccounting for Partnership

If partnership deed is silent in respect of interest on drawings, how…

If partnership deed is silent in respect of interest on drawings, how much interest will be charged?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → No interest on drawings is charged.

NCERT (2026-27 edition):
Provisions of Partnership Act Relevant for Accounting – “… (b) Interest on Capital: No partner is entitled to claim any interest on the amount of capital contributed by him in the firm as a matter of right. However, interest can be allowed when it is expressly agreed to by the partners. Thus, no interest on capital is payable if the partnership deed is silent on the issue. (c) Interest on Drawings: No interest is to be charged on the drawings made by the partners, if there is no mention in the Deed.”