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Under fixed capital method A capital is one lakh rupees and current account has credit balance fifteen thousand rupees. If the deed says interest on capital is only on capital account balance what is the base for interest?

Answer and explanation

Correct answer: One lakh rupees

The deed fixes capital account balance as the base. Credit balance of current account will not be added to the interest base.

Related tags

Interest On CapitalFixed CapitalCurrent AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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