Question

In case, profit before interest is equal to or more than the interest. The provision relating to interest on capital is
(a)Allowed at the agreed rate.
(b)Not allowed.
(c)Allowed only to the extent of profit in the ratio of each partner.
(d)Allowed whether there is profit or loss.​

Answer 1

Answer:

(c)Allowed only to the extent of profit in the ratio of each partner.

Explanation:

According to partnership act of 1932, no interest on capital should be given to the partners of the firm. However, interest on capital is given only out of the profits, if mutually agreed by all the partners.

Hope it helps.

Answer 2

Answer:

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