Question : In the event of change in profit-sharing ratio, profit and loss (credit balance) existing in the Balance Sheet is transferred to Capital Accounts of partners in their
Option 1: Sacrificing ratio
Option 2: Gaining ratio
Option 3: Old profit-sharing ratio
Option 4: New profit-sharing ratio
Correct Answer: Old profit-sharing ratio
Solution : Answer = Old profit-sharing ratio
When there's a change in the profit-sharing ratio among partners, the profit and loss (credit balance) existing in the Balance Sheet is typically transferred to the Capital Accounts of partners in their old profit-sharing ratio, reflecting the historical allocation of profits and losses before the change.
Hence, the correct option is 3.
Related Questions
Trending Articles/News
