Question

Accumulated profits/Losses & Reserves are shared by the old partners in their ________.

• A. Capital ratio
• B. New profit sharing ratio
• C. Sacrificing ratio
• D. Old profit sharing ratio

Answer 1

The correct option is D Old profit sharing ratio

Profits and losses of previous years which are not distributed to the partners are called accumulated profits and losses. Any reserve and accumulated profits and losses belong to the old partners and hence these should be distributed to the old partners in the old profit sharing ratio.