Question : Assertion (A): If the partnership deed does not address the payment of interest, the interest on loans to partners is charged at a rate of 6% per year.
Reason (R): In the absence of Partnership Deed, provisions of the Partnership Act, 1932 apply. Therefore, 6% annual interest should be added to the loan to the partner. If not, interest is permitted at the agreed-upon rate.
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: Both Assertion (A) and Reason (R) is not True
Correct Answer: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Solution : Both assertion and reason are true and reason is the correct explanation of the assertion. Partners are paid interest on loan of partner @6% p.a if partnership deed does not have provision against it. In this case provisions of the partnership act 1932 are applied.
Hence the correct answer is option 1.
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