Which of the following rules is applicable in the absence of a partnership agreement? Interest is payable
- on drawings at the rate of 5% per annum
-
on any contribution in excess of agreed capital at 5% per annum
- at 5% per annum on the current account balances
- on agreed capital contributed at 5% per annum
The correct answer is: B
Explanation
If no specific agreement is made by the partners, 5% interest a year on loans made by partners in excess of the agreed capitals.