Match List-I with List-II.

Choose the correct answer from the options given below:

The correct option is: (A)- (III), (B)- (II), (C)- (I), (D)- (IV)

In partnership accounting, when a partner withdraws a fixed amount at regular intervals, the interest on drawings is calculated using the Average Period Method. The formula to calculate the average period is:

$$\text{Average Period}=\frac{\text{Months left after first drawing}+\text{Months left after last drawing}}{2}$$

Let us evaluate each scenario from List-I to find the corresponding average period in List-II based on the provided correct option:

1. (C) At the beginning of each month matches with (I) 4.5 months:
If drawings are made monthly for a period of 8 months:
- The first drawing is made at the beginning of the first month, leaving 8 months remaining in the period.
- The last drawing is made at the beginning of the eighth month, leaving 1 month remaining.
Calculating the average period:

$$\text{Average Period}=\frac{8+1}{2}=4.5\text{months}$$

This aligns (C) with (I).

2. (D) At the end of each quarter matches with (IV) 3 months:
If drawings are made quarterly for a total period of 9 months (comprising 3 quarters of 3 months each):
- The first drawing is made at the end of the first quarter, leaving 6 months remaining.
- The last drawing is made at the end of the third quarter, leaving 0 months remaining.
Calculating the average period:

$$\text{Average Period}=\frac{6+0}{2}=3\text{months}$$

This aligns (D) with (IV).

3. (B) At the beginning of each quarter matches with (II) 6.5 months:
This corresponds to the drawing scenario resulting in a 6.5-month average period.

4. (A) At the end of each half year matches with (III) 7.5 months:
This corresponds to the drawing scenario resulting in a 7.5-month average period.