Question

In what proportion is the balance on Realisation Account transferred to Partner's Capital Account?

Options

• Profit-sharing ratio

• Gaining ratio

• Sacrificing ratio

• None of the above

Answer 1

Profit-sharing ratio

Explanation:

In their profit-sharing ratio, the balance of the Realisation Account will be transferred to Partners' Capital Accounts. If the partnership deed is silent, revenues or losses from the Realisation Account are to be split equally among all of the firm's partners.