Question : Assertion (A): A partner's interest on capital is paid only from profits.
Reason (R): Interest on capital is a profit appropriation that must be provided regardless of profit or loss.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) if false and Reason (R) is true
Correct Answer: Assertion (A) is true but Reason (R) is False
Solution : Interest on capital is an appropriaton and is provided when there is pro fit if no further information is given.
Hence the Correct answer is option 3.
