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What are the rules for distribution of profits and losses?

according to the sharing ratio's of partners, we can distribute profit and loss account.


What is the accounting treatment of a change in partners profit sharing ratio?

credit to gainig partner &debit to sacrificing partner


How do you calculate a profit margin ratio?

Profit Margin ratio is the comparison of profit as a percentage of revenue and calculated as follows Profit Margin ratio = Net Profit/Revenue


Where is gross profit ratio found?

[Gross Profit Ratio = (Gross profit / Net sales) × 100]


What are the ways to improve profit volume ratio?

cancept of profit valume ratio


Four differences between limited liability company and partnership?

1.In a Limited Liability Company the liability of the Directors is limited to the extent of in the value of the shares held by them in the company. In a Partnership firm the liability of the partners is in proportion to their profit sharing ratio. 2.The directors in a Limited Liability Company may or may not be shareholders in the company.They could be executive directors on salary. The partners in a partnership firm are the co owners of the company in proportion of capital employed individually. 3.The directors in a Limited Liability company earns salary.They are not liable individually in case of losses in the company. In a Partnership Firm the Partners earns salary (remuneration), Interst on capital employed in the business and a share of profit. 4.The terms and conditions and the the nature of business to be done by a Limited liability company is covered in the Memorandum and Articles of association. The same is covered by a Partnership deed in a partnership firm. The Profit and loss sharing ratio,remuneration to be paid and interest to be paid to partners is mentioned explicitly in the deed.


What is revaluation account?

revalutation account is opened to record the revaluation of assets and liabilities.the profit or loss arising because of revaluation is transfered to old partners capital account in their old profit sharing ratio. Companies from time to time check the values of assets and liabilities for there book values and if there is some changes in book values of assets and liabilities that revaluations are made through revaluation account which are later charge to profit and loss account or transferred to reserve account.


How do you calculate profit margin ratio?

net profit/sales


What is sharing in a ratio?

dividing in amounts


Gross profit ratio has been increased in first year and gross profit ratio has been decreased in second year then what is the financial position of the company?

This would completely depend on how far the gross profit ratio decreased in the second year compared to the ratio at the start of the year.


What are the Limitations of profit margin ratio?

The limitations for the profit margin ratio is in comparing different industries. Profit margins between say a supermarket and an aircraft manufacturer would vary considerably.


What is gross profit ratio and its purpose?

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