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The deed says that both interest on capital and interest on drawings will be recorded. What will be their effect?

Answer and explanation

Correct answer: First benefits partner and second benefits firm

Interest on capital is allowed to partner and interest on drawings is charged from partner. Remember their opposite directions in exams.

Related tags

Interest On CapitalInterest On DrawingsEffectPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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