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The deed provides (10%) interest on capital but capital accounts have become negative. What interest is allowed on such negative capital?

Answer and explanation

Correct answer: No interest on capital

Interest on capital is allowed on positive capital. Interest on negative balance is not allowed unless specifically instructed.

Related tags

PartnershipAdjustmentsNegative CapitalPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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