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WAEC Financial Accounting 2017 Question 34

Question 34

Partnership Accounts

Where there is no agreement between the partners, the Partnership Act states that

  1. A.5% interest is to be paid on capital.
  2. B.profit and losses are to be shared in proportion to their capital.
  3. C.50% interest is to be charged on drawings.
  4. D.no salary is to be paid to partners.
Show the answer and explanation

Answer: D (no salary is to be paid to partners.)

Explanation

Without an agreement, partners get no salaries, no interest on capital, pay no interest on drawings and share profits equally.