Question

Under Section 48 of the Partnership Act, 1932, the residue remaining after payment of debts, advances, and capital shall be divided among partners in their:

• A. Capital ratio
• B. Equal ratio
• C. Sacrificing ratio
• D. Profit sharing ratio

Hint:

Under Section 48: \[ \mathrm{Residue} \rightarrow \mathrm{Shared\ in\ Profit\ Sharing\ Ratio} \]

Answer 1

The Correct Option is D

Concept: Section 48 of the Indian Partnership Act, 1932 provides the rules for settlement of accounts at the time of dissolution of a firm. After payment of:
• External liabilities
• Partner's advances
• Partner's capital the remaining residue is distributed among partners according to their profit-sharing ratio.

Step 1: Understand Section 48.
The sequence of settlement is: \[ \mathrm{Debts} \rightarrow \mathrm{Advances} \rightarrow \mathrm{Capital} \rightarrow \mathrm{Residue} \] The residue is shared in: \[ \mathrm{Profit\ Sharing\ Ratio} \] Thus: \[ \boxed{\mathrm{Profit\ sharing\ ratio}} \]

Step 2: Analyze the remaining options.
Capital ratio Residue is not distributed according to capital contribution. \[ \Rightarrow \mathrm{Incorrect} \] Equal ratio Partners do not necessarily share equally. \[ \Rightarrow \mathrm{Incorrect} \] Sacrificing ratio Sacrificing ratio is used during admission of a new partner, not dissolution. \[ \Rightarrow \mathrm{Incorrect} \]

Step 3: Identify the correct option.
Therefore, residue remaining after settlement is divided in: \[ \boxed{\mathrm{Profit\ sharing\ ratio}} \] Hence, the correct answer is: \[ \boxed{\mathrm{(D)}} \]