If the deed states interest on capital (8%) when will it be allowed?

Correct answer: It will be allowed as per deed

Direct answer: Option A, it will be allowed according to the deed. The deed is the partners’ agreed authority for special adjustments. If it states interest on capital at 8%, the firm may calculate and allow that interest according to the stated conditions, period and applicable accounting rules. Step by step: identify the capital amount; apply the permitted rate, such as 8%; consider the relevant period; record the resulting amount in the appropriate accounts. Option A is correct because the deed expressly provides the rate. Option B is wrong because the clause does not say interest is prohibited. Option C is wrong because the interest is a partnership adjustment for the partner, not payment only to a bank. Option D is wrong because customers have no right to receive it. The exact treatment can depend on profit and legal provisions, so “as per deed” is the safe answer. Memory cue: written rate plus capital means calculate as agreed.