Question : In the absence of an agreement, partners are entitled to
Option 1: Salary
Option 2: Commission
Option 3: Interest on loans and advances
Option 4: Profit share in capital ratio
Answer (1)
21st Jan, 2024
Correct Answer: Interest on loans and advances
Solution :
Answer =
Interest on loans and advances.
In the absence of any agreement, Interest @ 6% P.A. is allowed on partner loans to the firm. This provision ensures fair compensation for the use of their funds and helps establish a standard practice for financial transactions within the partnership.
Hence, the correct option is 3.
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