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The deed says interest on capital will be allowed first and salary later. Profit is sufficient only for interest. What happens to salary?

Answer and explanation

Correct answer: Salary will not be allowed or will be deferred as per deed

If the deed gives an order it must be followed. A later appropriation may not be allowed when profit is insufficient.

Related tags

Priority ClauseSalaryInterest On CapitalPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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