If, after allowing A's salary, the remaining profit becomes negative, what is the negative balance treated as?

Correct answer: Loss to be shared among partners

The governing concept is the distinction between an appropriation and the resulting allocation of loss. A partner’s salary is an appropriation made before the residual profit is distributed. If the available profit is smaller than the salary allowed under the deed, subtracting the salary produces a negative residual. That negative figure is not an extra salary, an interest item, or income from a bank; it represents a loss arising after the agreed appropriation. The loss must be transferred to the partners’ capital or current accounts and shared in the loss-sharing ratio specified by the partnership deed. If the deed gives no separate loss ratio, the usual profit-sharing ratio is applied. Therefore option A is correct, while options B, C and D describe unrelated treatments.