[amp_mcq option1=”Interest will not be charged on partner’s drawings” option2=”Interest will be charged @ 5% p.a. on partner’s drawings” option3=”Interest will be charged @ 6% p.a. on partner’s drawings” option4=”Interest will be charged @ 12% p.a. on partner’s drawings” correct=”option1″]
The correct answer is: A. Interest will not be charged on partner’s drawings.
In the absence of a partnership deed, the law does not specify whether interest should be charged on partner’s drawings. Therefore, it is up to the partners to decide whether or not to charge interest. If they do not agree on whether or not to charge interest, then the court may decide on their behalf.
The other options are incorrect because they specify a rate of interest that is not mandated by law.