CA Inter P5 · Chapter 9 · Question 11 of 12
In the audit of a partnership firm, the document the auditor should study first to understand the rights and obligations of partners, such as profit-sharing ratio and interest on capital, is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The partnership deed
Explanation
A partnership firm is governed by the Indian Partnership Act, 1932 and its partnership deed. The deed sets out capital contributions, profit-sharing ratio, interest on capital and drawings, salaries and other terms that the auditor must verify. The memorandum of association and register of members relate to companies.
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