The FF and II partnership agreement provides for FF to receive a 20% bonus on profits before the bonus. Remaining profits and losses are divided between FF and II in the ratio of 2:3 respectively. Which partner has a greater advantage when the partnership has a profit? When it has a loss?
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.
The FF and II
bonus. Remaining
Which partner has a greater advantage when the partnership has a profit? When it has a loss?
a. FF; II
b. FF; FF
c. II; FF
d. II; II
Step by step
Solved in 2 steps
