Question : A and B are Partners in a firm. They are entitled to interest on capital, but if the net profit is not sufficient for this interest, then the net profit will be distributed among partners in
Option 1: Agreed ratio
Option 2: Profit sharing ratio
Option 3: Capital ratio
Option 4: Equally
Answer (1)
9th Jan, 2024
Correct Answer: Capital ratio
Solution :
Answer =
Capital ratio
In a partnership firm, if partners are entitled to interest on capital but the net profit is insufficient to cover this interest, the remaining profit will be distributed among partners based on their capital ratio.
Hence, the correct option is 3.
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