A and B are partners in a firm They are entitled to interest on their capitals but the net profit wa...........

A and B are partners in a firm. They are entitled to interest on their capitals but the net profit was not sufficient for this interest, then the net profit will be distributed among partners in :

Agreed Ratio

Profit Sharing Ratio

expense Ratio

Equally

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Explanation:

- Agreed Ratio: This refers to the ratio agreed upon by the partners for any specific purpose, like sharing of some particular income or expense.

- Profit Sharing Ratio : In this case this ratio will not be used

- Expense Ratio(Correct Answer ): In this case profits are short for charge against profit, so the avalable profits will distributed in the ratio of expense claim

- Equally: This would mean profits are shared equally regardless of capital contribution or agreements otherwise. It's only used if specified in the partnership agreement.