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If the deed says interest on capital will be allowed only on opening capital what effect will adding yearly profit to capital have on interest?

Answer and explanation

Correct answer: No effect

When opening capital is the base profit added later does not become the interest base. The deed base prevails.

Related tags

Opening CapitalInterest On CapitalDeedPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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