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.
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.
Solution
(A) is correct: without a deed, no salary or remuneration is allowed. (B) is correct: for equal drawings at the end of each month, average period months. (C) is correct: interest on capital is an appropriation, so with insufficient profit it is restricted to available profit, distributed in the ratio of interest entitlements. (D) is incorrect: deficiency under a guarantee is borne in the agreed ratio, or failing that in the profit sharing ratio, not the capital ratio.
Related questions:
2025: 27 May Shift 1
2026: 21 May Shift 1