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Partners are supposed to pay interest on drawings only when ______ by the ______. - Accounts

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Question

Partners are supposed to pay interest on drawings only when ______ by the ______.

Options

  • Provided, Agreement

  • Permitted, Investors

  • Agreed, Partners

  • ‘Provided, Agreement’ and ‘Agreed, Partners’

MCQ
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Solution

Partners are supposed to pay interest on drawings only when provided by the agreement and agreed to by the partners.

Explanation:

Interest on drawings is paid by partners only if it is explicitly mentioned in the partnership agreement and agreed upon by the partners. This ensures clarity and mutual consent on the terms of interest.

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Chapter 1: Accounting for Partnership Firms - Fundamentals - OBJECTIVE TYPE QUESTIONS [Page 1.181]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 1 Accounting for Partnership Firms - Fundamentals
OBJECTIVE TYPE QUESTIONS | Q 50. | Page 1.181
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