Partnership

Accounting

Easy

common

In the absence of partnership deed, interest on drawings is charged at.

6% p.a.

Nil

At the prevailing market rate.

6%p.m.

✅ Correct Option: 2

As per the Indian Partnership Act, 1932, when there is no partnership deed or when the deed is silent on certain matters, specific provisions automatically apply.

For interest on drawings, the Act states that no interest is charged on the amount withdrawn by partners from the business.

Interest on drawings is only applicable when it is specifically mentioned in the partnership deed with the rate and terms clearly stated.

Other key provisions in absence of partnership deed:

Profit sharing → Equal ratio
Interest on capital → Nil
Interest on loan by partner → 6% per annum
Salary to partners → Nil

The correct answer is Option 2: Nil

2026: 12 May Shift 1

The clauses of partnership deed can be altered with the consent of:

2026: 13 May Shift 1

Arun and Barun are partners in firm. The net divisible profit as per Profit and Loss Appropriation A/c of the firm is Rs. 7,50,000. The total interest on partner's drawing is Rs. 12,000. Arun's salary is Rs. 12,000 per quarter and Barun's salary is Rs.1,20,000 per annum. The net profit/loss earned during this year was:

2026: 6 June Shift 1

Anuj and Varun are partners sharing profits equally, with capitals of Rs. 1,00,000 and Rs. 80,000 respectively. Interest on capital is agreed @ 6% p.a. Varun is to be allowed an annual salary of Rs. 10,000. Manager is to be allowed commission Rs. 5,000. Anuj has also given a Loan on April 01, 2024 of Rs. 50,000 to the firm without any agreement. During the year 2024-25, the profit earned was Rs. 42,500. State their share of profit after necessary appropriations.

2025: 22 May Shift 1

Choose the correct statement if a partnership deed does not exist.

2026: 11 May Shift 1

A business has earned average profits of Rs. 2,00,000 during the last few years and the normal rate of return in a similar business is 10%. Ascertain the value of goodwill by capitalisation of average profits method, given that the value of net assets of the business is Rs. 10,20,000.

2022: 16 July Shift 2

Choose the correct sequence of financial statements prepared for a partnership firm at the end of a financial year.

A. Capital Accounts

B. Profit and Loss A/c

C. Profit and Loss Adjustment A/c

D. Balance Sheet

Choose the correct answer from the options given below:

In the absence of partnership deed, interest on drawings is charged at.

Solution

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