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JAMB Principles of Accounts 2011 Question 39

Question 39

Partnership Accounts

The major point of agreement carried by the partnership deed is

  1. A.5% interest per annum on any loan
  2. B.an oral agreement among the partners
  3. C.method of inheritance by the partners' children
  4. D.the profit and loss sharing ratio of the partners.
Show the answer and explanation

Answer: D (the profit and loss sharing ratio of the partners.)

Explanation

The most important term of the deed is how profits and losses are to be shared.