Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 14 - No. 30)
How are profits and losses of a partnership typically allocated to the partners?
According to the capital contribution ratio.
Equally, unless otherwise stated in the partnership agreement.
Based on the partners' skill level.
Based on the number of hours worked by each partner.
Explanation
Profits and losses are allocated based on the partnership agreement.
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