Why is profit sharing ratio written in a partnership deed?

Correct answer: To share profit and loss

Direct answer: option A, to share profit and loss. A partnership deed is the written agreement that records important terms accepted by the partners. The profit-sharing ratio tells how the firm’s profit, and normally its loss, will be divided among partners. For example, a ratio of 2:1 means two shares for one partner and one share for the other, after the relevant accounting adjustments. Option A is correct because this is the direct purpose of recording the ratio. Option B, buying goods, concerns purchasing operations, not the division of results. Option C, reducing rent, concerns an expense negotiation. Option D, changing the bank, concerns banking arrangements. The ratio prevents disputes by making the agreed division clear. Memory cue: partnership ratio answers ‘who gets how much of the result?’