When the old partners receive a bonus upon admission of a new partner into a partnership,the bonus is allocated to:
I.all the partners in their profit and loss sharing ratio.
II.the existing partners in their profit and loss sharing ratio.

Question

Quizplus · Accepted Answer

The old partners receive a bonus upon admission of a new partner into a partnership based on their profit and loss sharing ratio. Therefore, the bonus is allocated to the existing partners in their profit and loss sharing ratio, which is option II. Option I is not correct as it implies that the bonus is allocated to all partners, including the new partner who is not yet entitled to any share of the profits.

When the Old Partners Receive a Bonus Upon Admission of a New