WAEC Accounting 2023 Objective — Question 36

Question 36 of 50 from the West African Examinations Council (WAEC) Accounting 2023 Objective paper, with the correct answer and a full explanation.

Which of the following rules is applicable in the absence of a partnership agreement? Interest is payable

A. on drawings at the rate of 5% per annum.
B. on agreed capital contributed at 5% per annum.
C. on any contribution in excess of agreed capital at 5% per annum.Correct
D. at 5% per annum on current account balances.

Explanation

In the absence of a partnership deed, interest at 5% per annum is payable only on any contribution made by a partner in excess of the agreed capital (treated as a loan).

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