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If all entries in the Realisation Account are correct but the profit from realisation is distributed in the wrong profit-sharing ratio, what will be the result?

Answer and explanation

Correct answer: साझेदारों के पूंजी खातों में गलत शेष दिखाई देंगे

The profit on realisation is transferred to the partners in their profit-sharing ratio. If the ratio is applied incorrectly, the total realisation profit remains unchanged, but the amount credited to each partner’s capital account becomes incorrect, leading to an improper settlement of the partners’ final dues. Therefore, the partners’ capital accounts will show incorrect balances. Exam tip: Distribute realisation profit or loss in the old profit-sharing ratio unless the question specifically states otherwise.

Related tags

Dissolution Of PartnershipRealisation AccountProfit Sharing RatioCapital AccountsAccountancy Class 12Dissolution Of A Partnership FirmAccountancyClass 12 Mcq

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