Partnership

Accounting

Easy

common

When drawings are made at the beginning of every month for the full year, interest on drawings is calculated for

One Year.

6.5 months

6 months.

5.5 months.

✅ Correct Option: 2

When equal amounts are withdrawn at the beginning of every month throughout the year, we need to find the average period for which the total drawings remain with the partner.

The first drawing (made on 1st January) stays with the partner for 12 months, while the last drawing (made on 1st December) stays for only 1 month. All other drawings fall between these periods.

To find the average time period, we use:

Average Period = $\frac{n + 1}{2}$ months

where $n$ = total number of months = 12

Average Period = $\frac{12 + 1}{2}$ = $\frac{13}{2}$ = 6.5 months

This can also be verified by calculating the actual average:

Drawing periods: 12, 11, 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 months

Average = $\frac{12 + 11 + 10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1}{12}$ = $\frac{78}{12}$ = 6.5 months

Therefore, interest on drawings is calculated for 6.5 months.

The correct answer is Option 2.

2025: 26 May Shift 2

Which among the following is NOT true?

2026: 21 May Shift 2

Amita and Kabuliwala are partners, sharing profits in the ratio of 2:2 with capitals of Rs.1,50,000 and Rs.30,000 respectively. Interest on capital is agreed @ 6% p.a. A commission of Rs. 5000 is to be allowed to manager. During the financial year 2024-25, on Oct. 01, 2024, Amita gave a loan of Rs. 1,00,000 to the firm without any agreement. During the year 2024-2025, a profit of Rs. 2,22,250 was earned. Calculate the profit that would be transferred to Profit & Loss Appropriation A/C.

2026: 6 June Shift 1

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, then interest on drawings will be calculated for an average period of 5.5 months.

(C) If the partnership deed provides for interest on capital but the firm does not have sufficient profit, then the interest will be paid to the extent of available profit in the ratio of interest on capital.

(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.

2024

The adjustment required for overvaluation of closing stock, while calculating adjusted profit for calculating goodwill is

2026: 11 May Shift 1

A partnership deed should be properly drafted and prepared as per the provisions of which act?

2025: 29 May Shift 2

The steps followed for calculating interest on drawing in the product method are.

(A) Calculate number of month for which interest is due on each drawing

(B) List down amount of drawing in decending order in a table..

(D) Calculate product for each drawing by multiplying amount and number of month.

Choose the correct answer from the options given below:

When drawings are made at the beginning of every month for the full year, interest on drawings is calculated for

Solution

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