Interest on capital will be paid to the partners if provided for in the partnership deed but only ou...........

Interest on capital will be paid to the partners if provided for in the partnership deed but only out of:

Profits

Reserves

Accumulated Profits

Goodwill

- Interest on capital is paid to partners if there's a clause in the partnership deed.

- It indicates the share of profit partners earn from their invested capital.

- The interest is generally calculated as a percentage of the capital contributed by each partner.

- Option 1: Profits - Interest is paid out of the profits of the firm.

- Option 2: Reserves - Not typically used to pay interest, unless explicitly stated.

- Option 3: Accumulated Profits - These are previously retained profits, not the usual source for current interest.

- Option 4: Goodwill - Represents brand value, not a monetary fund for paying interest.

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