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Change in Profit Sharing Ratio(PSR)

Before changi...

Question

Before changing the profit sharing ratio, the old partners should share all the past profits and losses in the ratio.

A

old

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B

new

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C

gaining

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D

sacrificing

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Solution

The correct option is A old
Before changing the profit sharing ratio, the old partners should share all the past profits and losses in the old profit sharing ratio to keep things fair.

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Similar questions

Before changing the profit sharing ratio, the old partners should share all the past profits and losses in the ____________

Q. State the ratio in which the old partners share accumulated profits, reserves and losses.

X

Y

are partners in a firm sharing profits and losses in the ratio of

3 : 2

, With effect from

1 s t

2018

, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of Rs.

1, 50, 000

. Record the Journal entry for the distribution of the balance in the profit and Loss Account immediately before the change in the profit-sharing ratio.

Q. X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2 . With effect from 1st April, 2018, they decided to share future profits equally. On the date of change in the profit-sharing ratio, the Profit and Loss Account showed a credit balance of ₹ 1,50,000. Record the necessary journal entry for the distribution of the balance int he Profit and Loss Account immediately before the change in the profit-sharing ratio.

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

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