If partner A has guaranteed a minimum profit to partner B and there is a deficiency in profit, from which source will the deficiency be met?

Correct answer: From A's profit share

The guaranteeing partner (A) bears the deficiency. Under partnership accounting the deficiency is first adjusted against A's share of profit. Only if A's profit share is insufficient is the balance met from A's capital account. Option C is related but incorrect as the initial adjustment is from profit share; capital is a secondary recourse. Options B and D are incorrect because B's drawings are personal withdrawals and the firm does not meet a guarantee by directly charging its bank loan as the primary method. Exam tip: Reduce A's profit share in the Profit & Loss Appropriation (or adjust in partners' accounts); if still deficient, make an entry against A's capital account.