Question

1 point
Q.1. Which of the following is
not incorporated in the
Partnership Act?
all loans are to be allowed interest
@ 6% p.a.
O
all drawings are to be charged
interest
O
no interest is to be allowed on
capital
O
profit and loss are to be shared
equally​

Answer 1

The statement which is not incorporated is all drawings are to be charged  interest

• Because interest on draws is a kind of revenue for the company, it is added to the interest account, so increasing the company's overall revenue.
• However, according to the partnership Act, 1932, there can not be any interest charged by the partner on drawings.
• The partnership agreement does not allow for interest to be charged and the partnership document must be followed by all partners.