1)State one distinction between 'Charge against Profit' and 'Appropriation of Profit'.
A key distinction between 'Charge against Profit' and 'Appropriation of Profit' is that 'Charge against Profit' refers to expenses or losses deducted from the gross profit to arrive at the net profit, while 'Appropriation of Profit' involves distributing the net profit among partners or allocating it to various accounts like reserves, salaries, or interest on capital.
2)What is Fluctuating Capital Account of a partner?
The Fluctuating Capital Account of a partner represents changes in their capital due to factors such as investments, withdrawals, and their share of profits or losses in a partnership. It reflects the partner's changing financial stake in the business.
3)What is super profit in the valuation of goodwill
Super profit in the valuation of goodwill refers to the excess profit earned by a business over and above the normal or expected rate of return. It is a measure of the intangible value associated with the business's reputation, customer base, or other factors that generate extra earnings.
4)What share of profit would a 'sleeping partner', who has contributed 60% of the
total capital, get in absence of a deed?
In the absence of a deed specifying profit-sharing ratios, a sleeping partner's share of profits would typically be based on the ratio of their capital contribution to the total capital of the partnership. So, if the sleeping partner contributed 60% of the total capital, they would typically be entitled to 60% of the profits.
