Question : In the absence of a partnership agreement, interest on partners' drawings is charged:
Option 1: @ 8% p.a.
Option 2: @ 9% p.a.
Option 3: @12% p.a.
Option 4: No interest is charged.
Answer (1)
10th Jan, 2024
Correct Answer: No interest is charged.
Solution :
Answer =
No interest is charged
.
In the absence of a partnership deed, no interest will be charged on drawings made by the partners. This practice serves as a means to discourage excessive withdrawals, ensuring fairness in the distribution of profits and maintaining the financial stability of the partnership.
Hence, the correct option is 4.
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