Question

In the absence of information as to profit share of deceased partner being taken by the remaining partners, it is assumed that they take the profit share in ______.

Options

• Old profit-sharing ratio.

• New profit-sharing ratio.

• Equal ratio.

• None of these.

Answer 1

In the absence of information as to profit share of deceased partner being taken by the remaining partners, it is assumed that they take the profit share in old profit-sharing ratio.

Explanation:

In partnership accounting, if there is no explicit agreement or information detailing how the remaining partners will take over the deceased partner’s share, the law assumes that they acquire it in their existing relative proportions. This means the gaining ratio among the continuing partners automatically equals their old profit-sharing ratio among themselves.