If in a partnership the capitals are in the ratio 2:3 but the partners have agreed to share profits equally, on what basis will the net profit be distributed?

Correct answer: In equal profit-sharing ratio

Profit is distributed according to the profit‑sharing ratio specified in the partnership deed. Here the partners have agreed to share profits equally, so the net profit is shared equally. The capital ratio is applied only if the deed specifies profit sharing in proportion to capitals; it is not a default. Drawings or salaries are separate appropriations (salaries may be paid before distribution), but the remaining profit is still distributed according to the agreed profit ratio. Exam tip: Always check the partnership deed first — the stated profit-sharing ratio governs distribution; if none is given, profits are shared equally by default.