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If interest on capital of five thousand rupees was omitted and A B share profits equally why does the concerned partner not get full benefit?

Answer and explanation

Correct answer: Because interest reduces profit and his profit share also reduces

Interest on capital gives credit to that partner but reduces remaining profit. Therefore his net effect may be lower.

Related tags

Interest On CapitalNet EffectConceptAdjustmentsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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