Partnership Deed: Key Concepts

The written agreement among the partners.

The liability of partners which means they are responsible for business debts.

Amount on which the interest is allowed.

Rate of interest on capital in Partnership Deed's absence.

Partners have credit or debit balances in their capital accounts.

Fixed capital, interest on capital is credited to partner's current account.

Rent to partner is the odd one out.

Capital when current accounts of partners are maintained.

Absence of Partnership Deed profit is divided equally among the partners.

Lending name to the business without contributing any capital but get a share of money.

Do not take part in conducting the business however provide capital and share profits and losses in the agreed ratio.

The relationship of partner with the firm.

Features: two or more persons are carrying common business under an agreement

Every partner diligently attends his duties

Forming a Partnership Deed is: Not Mandatory.

In the absence of Partnership Deed the interest is allowed at @6% p.a on partner's loan account

In the absence of partnership deed there won't be any interest on drawings.

Equal share of profits

Which item not be recorded in the profit and loss appropriation account?: Rent Paid to Partners

Relation between the partners is of Agent and principal

Capital is to be contributed by all the partners in the firm. It is not an essential feature of partnership.

If date of drawings of the partner's is not given in the question, interest is charged for 6 Month

Interest on capital will be paid to the partners if provided for only if it is given in profit in partnership deed .

What is the nature of interest to the partners?

Partner capital account is fluctuating in that case Items/items will be recorded in the credit side are salary commission to mention few

Salary is to be considered for interest on total drawings. For 6 month