What allows salary to a partner?

Correct answer: A clause in the partnership deed

The governing concept is contractual authorization of partner remuneration. A partner does not automatically become entitled to salary merely because the partner performs work for the firm. Salary, commission, or other remuneration is allowed when the partnership deed contains a clear provision or when the partners later enter into a valid agreement authorizing it. The agreement may specify the amount, rate, duration, performance conditions, and method of payment. Therefore, option A is correct. A customer’s preference cannot create a contractual right for a partner, the price of goods is a trading matter, and a bank passbook is only a record of banking transactions. In accounting treatment, partner salary is generally an appropriation of profit rather than an ordinary expense payable to an outside employee.