Question

If the partnership deed is silent about the profit-sharing ratio, the profits and losses of the firm are to be shared in which ratio?

Options

• Equally

• In proportion to the ratio of their capital

• In the ratio of 2:1

• None of the above

Answer 1

Equally

Explanation:

If the profit-sharing ratio is not specified in the partnership agreement, gains and losses are to be shared equally by all partners, regardless of their capital contribution.