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Question
State Whether the following Statement is True or False:
Amit, a partner in a partnership firm withdrew ₹ 7,000 in the beginning of each quarter. Interest on drawings will be charged for 4.5 months.
True or False
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Solution
The statement is false.
Explanation:
When a partner withdraws a fixed amount in the beginning of each quarter, interest on drawings is calculated for an average period of 7.5 months, not 4.5 months.
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