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Question : A and B are Partners in a firm. They are entitled to interest on capital, but if the net profit is not sufficient for this interest, then the net profit will be distributed among partners in

Option 1: Agreed ratio

Option 2: Profit sharing ratio

Option 3: Capital ratio

Option 4: Equally


Team Careers360 8th Jan, 2024
Answer (1)
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Team Careers360 9th Jan, 2024

Correct Answer: Capital ratio


Solution : Answer = Capital ratio
In a partnership firm, if partners are entitled to interest on capital but the net profit is insufficient to cover this interest, the remaining profit will be distributed among partners based on their capital ratio.
Hence, the correct option is 3.

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