1. If the partnership agreement does not specify how profits or losses are to be distributed, they should be allocated based on relative capital account balances. I. The industrial partner is not liable for lasses because he cannot withdraw the work or labor already done by him. I. Partnership profits and losses are divided among partners according to their sharing agreement. If no sharing agreement exists, profits and losses are divided equally. IV. It is possible to allocate profit or loss to partners based solely on average capital balances, Only one statement is false O Two statements are true All of the statements are true O All statements are false
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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