Because partner's interest on capital is accumulated expense. so it is deduct from accumulated profit

Introduction:
Interest on capital is a payment made by a partnership to its partners for the use of their capital contributions in the business. It is a way to compensate partners for the opportunity cost of investing their money in the partnership rather than elsewhere.

Explanation:
Interest on capital can be paid to partners only if it is provided for in the partnership agreement. The agreement should clearly specify the rate of interest payable on the capital and the conditions under which it will be paid.

The correct answer to the given question is option 'A' - Current Profits. This means that interest on capital will be paid to the partners only if there are sufficient current profits available in the partnership.

Reasoning:
Interest on capital is a distribution of profits to the partners. It is different from the allocation of profits based on the profit-sharing ratio. While the allocation of profits is based on the agreed ratio, interest on capital is paid on the actual capital invested by partners.

Interest on capital is usually calculated as a fixed percentage of the capital contributed by each partner. It is an expense for the partnership and reduces the overall profits available for distribution.

The partnership agreement should clearly state whether interest on capital will be paid and at what rate. If the agreement does not provide for the payment of interest on capital, partners will not be entitled to receive it.

The payment of interest on capital is dependent on the availability of current profits. Current profits are the profits earned by the partnership during the current accounting period. If there are no or insufficient current profits, partners will not be entitled to receive interest on capital.

In contrast, options 'B' (Reserves), 'C' (Accumulated Profits), and 'D' (Goodwill) are not appropriate sources for the payment of interest on capital. Reserves are profits that have been set aside for specific purposes and may not be available for distribution. Accumulated profits are profits that have been retained in the business over a period of time and may also be unavailable for distribution. Goodwill is an intangible asset and cannot be used to pay interest on capital.

Therefore, the correct answer is option 'A' - Current Profits. Interest on capital will be paid to the partners if provided for in the agreement and only from the current profits of the partnership.