Question

if the cash is insufficient to pay off all
partners loans, payment is made
O in the ratio of outstanding loan balances
O in the profit sharing ratio
O in the capital ratio
O in the expense ratio​

Answer 1

Answer:

in the profit sharing ratio. is the answer

Answer 2

The correct answer is option (a) if the cash is insufficient to pay off all.

• After all the outside liabilities are paid of the internal liabilities i.e.The partners loans are paid off in the next stage.
• If the cash is insufficient, payment is made against all partners  loans proportionately  in the ratio of outstanding balances.
• So, among all the options the correct answer is that if the cash is insufficient to pay off all  partners loans, payment is made in the ratio of outstanding loan balances.