Mastering Profit Sharing Ratios in Partnerships Quiz
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Questions and Answers

Which of the following best defines profit sharing ratio?

  • The amount of revenue that each partner receives in a partnership
  • The percentage of profit that each partner receives in a partnership (correct)
  • The amount of profit that each partner receives in a partnership
  • The percentage of revenue that each partner receives in a partnership

    • What does profit sharing ratio determine in a partnership?

  • The amount of profit that each partner receives (correct)
  • The percentage of profit that each partner receives
  • The amount of revenue that each partner receives
  • The percentage of revenue that each partner receives

    • In a partnership, if the profit sharing ratio is not explicitly mentioned, how is the profit usually distributed?

  • Equally among all partners
  • Based on the number of years of experience of each partner
  • Based on the amount of capital invested by each partner (correct)
  • Based on the percentage of revenue generated by each partner

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