Question

When a firm is dissolved, profit or loss on realization is shared by the partners .

a) in the profit sharing ratio. b) equally c) In the ratio of their capital balances d) None of the above​

Answer 1

Answer:

a) in their profits sharing ratio

Answer 2

Explanation:

Settlement of accounts on dissolution

Losses including deficiencies of capital shall be first paid out from the profits, next from the capital, and if necessary, by the personal contribution of partners in their profit-sharing ratio.

When a firm is dissolved profit or loss on Realisation is shared by the partners?

Realisation loss is transferred to Capital Account. 2. The cash available in the firm and received from private estate of the partners is paid to Creditors, after meeting the realisation expenses, if any. The unpaid balance will be transferred to Deficiency Account.