{"id":49436,"date":"2024-04-15T22:55:43","date_gmt":"2024-04-15T22:55:43","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=49436"},"modified":"2024-04-15T22:55:43","modified_gmt":"2024-04-15T22:55:43","slug":"interest-on-capital-provided-to-partners-is-calculated-on","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/interest-on-capital-provided-to-partners-is-calculated-on\/","title":{"rendered":"Interest on capital provided to partners is calculated on"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Capital at the end-drawing&#8221; option2=&#8221;Capital at the end of the year&#8221; option3=&#8221;On Average capital&#8221; option4=&#8221;Opening capital of the year&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is C. On Average capital.<\/p>\n<p>Interest on capital provided to partners is calculated on the average capital employed by the partners during the year. The average capital is calculated by taking the opening capital and the closing capital and dividing it by 2.<\/p>\n<p>For example, if the opening capital of a partner is $100,000 and the closing capital is $150,000, then the average capital is $125,000. The interest on this capital is calculated at a rate agreed upon by the partners and is usually paid out at the end of the year.<\/p>\n<p>The other options are incorrect because they do not take into account the average capital employed by the partners during the year.<\/p>\n<p>A. Capital at the end-drawing is not a good measure of the capital employed by the partners because it does not take into account the capital that was withdrawn during the year.<\/p>\n<p>B. Capital at the end of the year is not a good measure of the capital employed by the partners because it does not take into account the capital that was invested during the year.<\/p>\n<p>D. Opening capital of the year is not a good measure of the capital employed by the partners because it does not take into account the capital that was withdrawn or invested during the year.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Capital at the end-drawing&#8221; option2=&#8221;Capital at the end of the year&#8221; option3=&#8221;On Average capital&#8221; option4=&#8221;Opening capital of the year&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-49436","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Interest on capital provided to partners is calculated on<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/interest-on-capital-provided-to-partners-is-calculated-on\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Interest on capital provided to partners is calculated on\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Capital at the end-drawing&#8221; option2=&#8221;Capital at the end of the year&#8221; option3=&#8221;On Average capital&#8221; option4=&#8221;Opening capital of the year&#8221; correct=&#8221;option3&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/interest-on-capital-provided-to-partners-is-calculated-on\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T22:55:43+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Interest on capital provided to partners is calculated on","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/interest-on-capital-provided-to-partners-is-calculated-on\/","og_locale":"en_US","og_type":"article","og_title":"Interest on capital provided to partners is calculated on","og_description":"[amp_mcq option1=&#8221;Capital at the end-drawing&#8221; 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