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In the absence of any contract to the contrary, capital profit on the dissolution of a Partnership Firm is shared among partners in:
- a)Equal ratio
- b)Capital ratio
- c)Profit-sharing ratio
- d)More than one of the above
Correct answer is option 'C'. Can you explain this answer?
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In the absence of any contract to the contrary, capital profit on the ...
→ At the time of dissolution of a partnership firm, capital profit (surplus) is shared among partners according to their profit-sharing ratio unless specified otherwise in a contract.
→ As per Section 48 of the Indian Partnership Act, 1932:
Losses, including capital deficiencies, are settled first out of profits, then capital, and lastly by partners in their profit-sharing ratio.
Surplus or capital profit (if any) remaining after paying all liabilities, advances, and capital contributions is divided among partners in their profit-sharing ratio.
Identify which account is prepared at last in the process of firm’s dissolution:
Option A: Realization Account
Option B: Partner’s Capital Accounts
Option C: Cash Account
Option D: More than one of the above
Answer: Option C: Cash Account
→ As per Section 48 of the Indian Partnership Act, 1932:
Losses, including capital deficiencies, are settled first out of profits, then capital, and lastly by partners in their profit-sharing ratio.
Surplus or capital profit (if any) remaining after paying all liabilities, advances, and capital contributions is divided among partners in their profit-sharing ratio.
Identify which account is prepared at last in the process of firm’s dissolution:
Option A: Realization Account
Option B: Partner’s Capital Accounts
Option C: Cash Account
Option D: More than one of the above
Answer: Option C: Cash Account
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In the absence of any contract to the contrary, capital profit on the dissolution of a Partnership Firm is shared among partners in:a)Equal ratiob)Capital ratioc)Profit-sharing ratiod)More than one of the aboveCorrect answer is option 'C'. Can you explain this answer?
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