Under the Single Entry System, if opening capital is Rs 1,00,000, closing capital is Rs 90,000, and drawings are Rs 30,000 (no fresh capital), the profit is:
S1: In the absence of a partnership deed, partners are entitled to a salary. S2: In the absence of a partnership deed, interest on capital is not allowed. Which statement(s) is/are correct?
Explanation:
Under the Indian Partnership Act 1932, if the deed is silent, no partner can claim a salary, and no interest on capital is allowed. However, interest on drawings is also not charged. S1 is incorrect, S2 is correct.
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