In which order losses are paid including deficiencies of capital at the time of settlement of account when the partnership firm is dissolved: a) Out of Capital b) If necessary, brought by partners c) Out of profit
Options:
abc
cba
acb
cab
Correct Answer:
cab
Explanation:
Losses, including deficiencies of capital, shall be paid : (i) first out of profits, (ii) next out of capital of partners, and (iii) lastly, if necessary, by the partners individually in their profit sharing ratio