Question : On dissolution of a partnership firm, profit or loss on realisation is distributed among the partners ________.
Option 1: In capital ratio
Option 2: In Profit sharing ratio
Option 3: Equally
Option 4: None of the above
Answer (1)
25th Jan, 2024
Correct Answer: In Profit sharing ratio
Solution : According to their Profit sharing percentages as outlined in their partnership agreement, the partners' portion of the profits should be distributed among them. In the absence of a written or verbal agreement, each partner is entitled to share equally in profits and losses under common law.
Hence the correct answer is option 2.
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