English

State Whether the following Statement is True or False: If the partnership deed is silent, interest @ 6% p.a. would be charged on the drawings made by the partner.

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Question

State Whether the following Statement is True or False:

If the partnership deed is silent, interest @ 6% p.a. would be charged on the drawings made by the partner.

True or False
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Solution

The statement is false.

Explanation:

If the partnership deed is silent, no interest is charged on drawings. Interest on drawings can be charged only if the partnership agreement specifically provides for it.

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Chapter 1: Accounting for Partnership Firms - Fundamentals - OBJECTIVE TYPE QUESTIONS [Page 1.142]

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D. K. Goel Accountancy Part A Volume 1 and 2 [English] Class 12
Chapter 1 Accounting for Partnership Firms - Fundamentals
OBJECTIVE TYPE QUESTIONS | Q (B) 14. | Page 1.142
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