English

State Whether the following Statement is True or False: Losses are ignored while calculating the average profit.

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Question

State Whether the following Statement is True or False:

Losses are ignored while calculating the average profit.

True or False
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Solution

The statement is false.

Explanation:

Losses are not ignored while calculating average profit. All profits and losses of the given years are considered, and the net profit or loss is divided by the number of years to calculate the average profit.

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Chapter 2: Change in Profit Sharing Ratio among the Existing Partners - OBJECTIVE TYPE QUESTIONS [Page 2.97]

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D. K. Goel Accountancy Part A Volume 1 and 2 [English] Class 12
Chapter 2 Change in Profit Sharing Ratio among the Existing Partners
OBJECTIVE TYPE QUESTIONS | Q (B) 20. | Page 2.97
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