What is the purpose of writing interest on drawings in the deed?

Correct answer: To charge interest on personal withdrawals

The direct answer is A: interest on drawings is charged on a partner’s personal withdrawals from the firm. Drawings are amounts or goods taken by a partner for personal use, not for the firm’s business. Because the partner uses firm resources before the final distribution, the deed may require interest on those drawings. The interest is treated as an adjustment in the partnership accounts, generally increasing the firm’s income or reducing the partner’s entitlement according to the agreed method. Option A is correct because it directly describes the purpose: charging interest on personal withdrawals. Option B is wrong because interest on drawings does not stop the firm’s sales. Option C is wrong because drawings interest does not convert capital into a loan; capital and drawings are separate account matters. Option D is wrong because it has nothing to do with removing a new partner. The amount of interest depends on the deed, rate, amount withdrawn, and sometimes timing of withdrawals. Memory cue: capital brought in may earn interest, while personal money taken out may attract interest on drawings; always follow the partnership deed.