Deficiency of Insolvent partner will be suffered by solvent partners in their ________ ratio.

Question

Select the most appropriate alternative from those given below :

Deficiency of Insolvent partner will be suffered by solvent partners in their ________ ratio.

Options

• Capital ratio
• Profit-sharing ratio
• Sale ratio
• Liquidity ratio

Answer 1

Deficiency of Insolvent partner will be suffered by solvent partners in their profit-sharing ratio.

Explanation: If deficiency of insolvent partner (i.e. the debit balance in the insolvent partner’s capital account) is treated as an ordinary loss, then this loss is to be borne by the other solvent partners in their profit-sharing ratio.