If minimum profit is guaranteed by the firm what will the deficiency affect?

Correct answer: Profit available to other partners

A minimum-profit guarantee promises that a specified partner will receive at least the guaranteed amount. If that partner’s normal share is lower than the guaranteed amount, the difference is called a deficiency. When the firm gives the guarantee, the deficiency is borne out of the firm’s distributable profit; in practical terms, it reduces the residual amount available for distribution among the other partners. Hence option A is correct. The adjustment does not exclusively affect the bank account or stock account, because it is an appropriation of profit rather than a purchase or cash transaction. Option D is incorrect because the deficiency must be allocated to someone under the guarantee arrangement.