Partnership

Accounting

Medium

common

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..

(C) find the total of product and apply the formula to calculate interest on drawing.

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

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (B), (D), (C)

(B), (A), (D), (C)

(C), (B), (D), (A)

✅ Correct Option: 3

The Product Method for calculating interest on drawings follows a systematic sequence:

Logical Flow of Steps:

The process begins by organizing the data. We list down the amount of each drawing in descending order in a tabular format (Step B). This helps in maintaining clarity and systematic calculation.

Next, for each drawing, we determine the time period by calculating the number of months from the date of drawing till the end of the accounting year (Step A).

After establishing both the amount and time period, we calculate the product for each drawing by multiplying the amount drawn with the corresponding number of months (Step D).

Finally, we find the total of all products and apply the interest formula (Step C):

Interest on Drawings = $\frac{\text{Total of Products} \times \text{Rate}}{100}$

Correct Sequence: B → A → D → C

First organize the data, then calculate time periods, compute individual products, and finally apply the formula on total products.

Correct Option: 3

2026: 6 June Shift 1

Suppose Gunjan and Himani are partners in a firm sharing profits and losses equally. During 2024-25, Gunjan withdrew Rs. 30,000 quarterly in the begining of each quarter. If interest is to be charged on drawings @ 8% p.a., the interest on drawings will be:

2026: 20 May Shift 1

Which Accounting Standard (AS) defines an intangible asset, as an identifiable, non-monetary, without physical existence and held for use in the production or supply of goods or services for rental to others or for administrative purposes?

2026: 19 May Shift 1

Which of the following is not a feature of partnership as per Partnership Act 1932 ?

2026: 20 May Shift 1

The Goodwill of a firm is Rs 30,000, when it is valued at three years' purchase of the super profits of the business. Find the normal rate of return, if the firm's capital employed is Rs 5,00,000 and average profits of last five years were Rs 60,000.

2025: 16 May Shift 1

There is a need for valuation of goodwill under which of the following cases

(A) Admission of new partner

(B) Retirement of a partner

(D) Amalgamation of partnership firms.

Choose the correct answer from the options given below:

2026: 11 May Shift 2

Anu and Shikha are partners sharing profits and losses in the ratio of 3:2. Their capital accounts showed balances of Rs. 1,50,000 and Rs. 2,00,000 respectively on April 01, 2024. The partnership deed provides for interest on capital @ 8% p.a. and the firm earned a profit of Rs. 21,000 during the year. Show the calculation of interest on capital for the year ending March 31, 2025, by which Anu and Shikha would be:

Solution

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