In the absence of an agreement to the contrary, partners share profits and losses in _________________________.

The ratio of their capitals in the beginning of the year

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The ratio of their capitals at the end of the year

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The ratio of average capital

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Equal ratio

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Solution

The correct option is B Equal ratio
Partnership Agreement defines the ratio in which partners are supposed to share the profit & loss of the business every year.
If the agreement is silent on the profit sharing ratio, in such case partners share profit and losses in equal ratio.

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Similar questions

Q. A, B and C are partners sharing profits and losses in the ratio of A 1/2, B 3/10, C 1/5 after providing for interest @ 5% on their respective capitals, viz., A ₹ 50,000; B ₹ 30,000 and C ₹ 20,000 and allowing B and C a salary of ₹ 5,000 each per annum. During the year ended 31st March, 2018, A has drawn ₹ 10,000 and B and C in addition to their salaries have drawn ₹ 2,500 and ₹ 1,000 respectively. The Profit and Loss Account for the year ended 31st March, 2018 showed a net profit of ₹ 45,000 before charging (a) interest on capital and (b) partners' salaries. On 1st April, 2017, the balances in the current Account of the partners were A (cr.) ₹ 4,500; B (Cr.) ₹ 1,500 and C (Cr.) ₹ 1,000. Interest is not charged on Drawings or Current Account balances. Show Partners' Capital and Current Accounts as at 31st March, 2018 after division of profits in accordance with the partnership agreement.

A

and

B

started a business with a total capital of Rs

30, 000

.At the end of the year, they shared the profit in the ratio of their investments.If their capitals were interchanged, then

A

would have received

175 %

more than what he actually received.Find the capital of

B

A and B are partners sharing profits and losses in the ratio of 3:1. On 1st Jan, 2007, they admitted C as a new partner for $\frac{1}{4}$ share in the profits of the firm. C brings Rs. 20,000 as for his $\frac{1}{4}$ share in the profits of the firm. The capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and liabilities etc has been worked out at Rs. 50,000 for A and Rs. 12,000 for B. It is agreed that partner's capitals will be according to new profit sharing ratio. Calculate the new capitals of A and B and pass the necessary journal entries assuming that A and B brought in or withdrew the necessary cash as the case may be for making their capitals in proportion to their profit sharing ratio.

A and B are partners sharing profits and losses in the ratio of 3:1. On Ist Jan. 2017 they admitted C as a new partner for 1/4 share in the profits of the firm. C brings Rs 20,000 as for his 1/4 share in the profits of the firm. The capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and liabilities, etc. has been worked out at Rs 50,000 for A and Rs 12,000 for B. It is agreed that partner’s capitals will be according to new profit sharing ratio. Calculate the new capitals of A and B and pass the necessary journal entries assuming that A and B brought in or withdrew the necessary cash as the case may be for making their capitals in proportion to their profit sharing ratio?

A, B & C are partners in a firm sharing profits & losses in ratio of 2:3:5. Their fixed capitals were Rs. 15,00,000, Rs. 30,00,000 & Rs. 60,00,000 respectively.. For the year ended 31st March 2015, interest was credited @12% instead of 10%. Pass the necessary adjustment entry.

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In the absence of an agreement to the contrary, partners share profits and losses in _________________________.

The correct option is B Equal ratioPartnership Agreement defines the ratio in which partners are supposed to share the profit & loss of the business every year. If the agreement is silent on the profit sharing ratio, in such case partners share profit and losses in equal ratio.

The correct option is B Equal ratio
Partnership Agreement defines the ratio in which partners are supposed to share the profit & loss of the business every year.
If the agreement is silent on the profit sharing ratio, in such case partners share profit and losses in equal ratio.