Question

When the profits are guaranteed by the partners on the old profit sharing ratio, which of the following is not true?

Options

• Amount guaranteed to a partner is transferred to Profit and Loss Appropriation A/c.

• Then the remaining profits are distributed among old partners/remaining partners in the remaining ratio.

• Guaranteed amount is calculated according to his share.

• All of the above

Answer 1

Guaranteed amount is calculated according to his share.