Question

Assertion (A): On the death of a partner, the profit-sharing ratio among the remaining (continuing) partners always changes if the firm continues.

Reason (R): Unless otherwise agreed, the deceased partner’s profit share is taken by the continuing partners in their old profit-sharing ratio.

Choose the correct alternative from the following:

Options

• Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is correct, but Reason (R) is not correct.

• Assertion (A) is incorrect, but Reason (R) is correct.

Answer 1

Assertion (A) is incorrect, but Reason (R) is correct.

Explanation:

The Reason is correct unless the partners agree otherwise; the deceased partner’s share is absorbed by the continuing partners in their old profit‑sharing ratio. Because they take the deceased’s share proportionally, the relative ratio among the continuing partners remains the same (so the Assertion that the ratio “always changes” is false).