Question : In the event of change in profit-sharing ratio, profit and loss (Dr) 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 existing profit and loss account balance is transferred to the partners' capital accounts according to the old profit-sharing ratio. This ensures that each partner's share of the accumulated profits or losses reflects their previous profit-sharing arrangement.
Hence, the correct option is 3.
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