When there is no agreement among the partners, the profit or loss of the firm will be shared in their capital ratio.

True

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False

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Solution

The correct option is B False
If there is no partnership agreement the profits will be share equally. ... The profit must be share equally in the case of a partnership firm ... Profit sharing Ratio : Profits and losses would be shared equally among partners. ... If there is an agreement to allow interest on capital it is to be allowed only in case of .

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Similar questions

Q. If the partnership deed is _______ about the profit sharing ratio, the profits and losses of the firm are to be shared equally by partners, irrespective of their capital contribution in the firm.

Where there is no partnership agreement exists between partners, what will be the profit sharing ratio between the partners?

Q. Following is the Balance Sheet of A and B , who shared Profits and Losses in the ratio of 2 : 1 , as at 1st April, 2018:

BALANCE SHEET OF A AND B as on 1st April, 2018
Liabilities		₹	Assets	₹
Capital A/cs:			Land ad Buildings	2,90,000
A	3,00,000		Furniture	80,000
B	2,00,000	5,00,000	Stock	2,40,000
Reserve		1,50,000	Debtors	1,50,000
Creditors		2,00,000	Bank	60,000
			Cash	30,000

		8,50,000		8,50,000

On the above date , the partners changed their profit-sharing ratio to 3 : 2 . For this purpose, the goodwill of the firm was valued at ₹ 3,00,000 . The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5,00,000;
(b) Reserve is to be maintained at ₹ 3,00,000.
(c) The total capital of the partners in the new firm will be ₹ 6,00,000 , which will be shared by the partners in their new profit-sharing ratio .
Prepare Revaluation Account , Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

Q. Profit or loss on revaluation is shared among the partners in __________ ratio.

Q. Following is the Balance Sheet of A and B, who shared Profits and Losses in the ratio of 2 : 1, as at 1st April, 2019:

BALANCE SHEET OF A AND B as on 1st April, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Capital A/cs:			Land ad Building	2,90,000
A	3,00,000		Furniture	80,000
B	2,00,000	5,00,000	Stock	2,40,000
Reserve		1,50,000	Debtors	1,50,000
Creditors		2,00,000	Bank	60,000
			Cash	30,000

		8,50,000		8,50,000

On the above date, the partners changed their profit-sharing ratio to 3 : 2. For this purpose, the goodwill of the firm was valued at ₹ 3,00,000. The partners also agreed for the following:
(a) The value of Land and Building will be ₹ 5,00,000;
(b) Reserve is to be maintained at ₹ 3,00,000.
(c) The total capital of the partners in the new firm will be ₹ 6,00,000, which will be shared by the partners in their new profit-sharing ratio.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.

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