JAMB Accounting 2014 Objective — Question 40

Question 40 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2014 Objective paper, with the correct answer and a full explanation.

In the absence of a partnership deed, the act stipulates that

A. an amount should be fixed as salary for partners
B. interest on partners' loan should be 25% interest
C. interest should not be allowed on partners' drawingsCorrect
D. profits and losses should not be shared equally

Explanation

If there is no partnership agreement, then no interest is charged in anything, and only partners' loan attracts 5%; interest should not be allowed on partners' drawings.

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