Which of the following is correct? The important provision affecting partnership accounting, in the absence of a partnership deed is:

The correct option is: Interest on Drawings: No interest is to be charged on the drawings made by the partners, if there is no mention in the Deed.

Explanation of Partnership Provisions in the Absence of a Partnership Deed:
When partners do not enter into a formal partnership agreement (or partnership deed), or if the deed is silent on specific matters, the provisions of the Indian Partnership Act, 1932 (or standard accounting practices governing partnerships) apply automatically. Let us analyze each provision step-by-step:

1. Profit and Loss Sharing Ratio:
In the absence of a partnership deed, all profits and losses of the firm must be shared equally among the partners, regardless of their individual capital contributions. Therefore, the statement suggesting that profits are shared in the capital ratio is incorrect.

2. Interest on Capital:
No partner is entitled to receive any interest on the capital contributed by them to the firm. Thus, claiming interest on capital as a matter of right is incorrect.

3. Interest on Drawings:
Drawings refer to the cash or goods withdrawn by partners from the business for personal use. If the partnership deed is silent, the firm cannot charge any interest on the drawings made by the partners. This makes the selected option correct.

4. Interest on Partner's Loan:
If a partner has advanced a loan to the firm beyond their capital contribution for business purposes, they are entitled to receive interest on that loan at a fixed rate of 6% per annum. The statement claiming a rate of 16% per annum is incorrect.