If a partnership deed shows partners' capital ratio different from their profit-sharing ratio, what does this mean?

Correct answer: Profit need not be shared in the same proportion as capital contributions

Profit-sharing is governed by the partners' agreement in the partnership deed and need not follow the proportion of capital contributions. Partners may agree different ratios for reasons such as services rendered, salaries, or agreed goodwill sharing. Option A is correct because the deed can specify a different profit ratio. Option B is wrong — the existence of a different ratio does not mean profits will not be distributed; they will be distributed as per the deed. Option C is wrong because capital accounts do not automatically adjust to match profit ratios unless a specific reallocation or change in capital is made. Option D is wrong — differing ratios do not cause automatic dissolution. Exam tip: always check the partnership deed first; if it is silent, use equal sharing or the default rule given in your syllabus.