Concept:In the absence of a partnership agreement, statutory rules apply, including interest on loans or excess contributions by partners.
Explanation:When no partnership deed exists, partners do not receive interest on capital, and no interest is charged on drawings.
However, any amount contributed by a partner beyond the agreed capital is treated as a loan to the firm.
On this excess contribution, the firm must pay interest at
5% per annum.
This rule is standard when partners fail to specify terms in a partnership agreement.
Answer:B. on any contribution in excess of agreed capital at
5% per annum.