In the absence of a partnership deed, the act stipulates that

Accounts - Principles of Accounts

JAMB 2014

A. an amount should be fixed as salary for partners
B. interest on partners loan should be 25%
C. interest should not be allowed on partners drawings
D. profits and losses should not be shared equally

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Correct Answer: Option C

Explanation

In absence of a partnership deed, a partnership Act cannot allow you to charge interest on capital, you cannot charge interest on drawing, you cannot give any salary to any partner, any rent to any partner, and any commission to any partner. also, you have to share profit in an equal ratio.

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