JAMB Accounting 2007 Objective — Question 5

Question 5 of 46 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2007 Objective paper, with the correct answer and a full explanation.

I. Profits and losses will be shared unequally II. Interest is not allowed on capital III. Salaries are not allowed IV. Interest is charged on drawings. From the above, which of the following would apply where there is no agreement during partnership formation?

A. I only
B. I, II and III
C. I, II and IV
D. II and IIICorrect

Explanation

Where there is no partnership agreement, the default rules under the Partnership Act apply: profits/losses are shared equally (not unequally), no interest is allowed on capital, no salaries are allowed, and no interest is charged on drawings. Only statements II and III are correct.

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