Question : Assertion (A): In order to compensate a partner for contributing capital to the firm in excess of the profit-sharing ratio, the firm pays such interest on the partner's capital.
Reason (R): Interest on capital is treated as a charge against profit.

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.

Question : Assertion (A) : Profit and Loss Appropriation account shows the correct profit earned by the firm.

Reason (R) : The net Profit adjusted after takin into account the interest on capital, Interest on drawings, Salaries/ Commission Paid

Question : Assertion (A): When partners agree on a profit-sharing ratio, they also agree on a loss-sharing ratio.

Reason (R): Although it is stated in the definition that profits will be shared. However, profits also include losses.

Question : Assertion: Physical capital is tangible in nature 
Reason: Physical capital can be seen and touchable.