Question

The solvent partners must share the deficiency of an insolvent partner

Multiple Choices

A.
In the profit-sharing ratio
B.
In the capital ratio
C.
In the current ratio
D.
None of these​

Answer 1

Answer:

ANSWER :-

▪︎ Option b. In the capital ratio.

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Answer 2

The solvent partners must share the deficiency of an insolvent partner in the profit-sharing ratio. Thus, the correct answer will be option A.

• The state of insolvency is when a business's debts are larger than its assets. In short, the business cannot pay its debts and thus cannot continue to operate.
• The profit-sharing ratio is the ratio in which partners decide to share their profits in a partnership firm.
• The capital sharing ratio is the ratio in which partners contribute to the capital of a partnership firm.
• The current ratio is the ratio between a firm's current assets and current liabilities. It is calculated to ascertain a firm's short-term solvency or its ability to pay its debts in the short term.
• A solvent partner must share the deficiency of an insolvent partner in the profit-sharing ratio.
• So, the answer will be option A. The solvent partners must share the deficiency of an insolvent partner in the profit-sharing ratio.

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