Question

Arrange the following in a sequence in which they will be utilized for the payment of losses: (A) Out of capital of partners.
(B) Out of profits.
(C) By the partners individually in their profit sharing ratio.

• A. (A), (B), (C)
• B. (A), (C), (B)
• C. (B), (A), (C)
• D. (B), (C), (A)

Hint:

Always remember: Profits → Capital → Partners' personal contribution in profit ratio.

Answer 1

The Correct Option is C

Step 1: Legal Order of Loss Adjustment.
As stipulated by Section 48 of the Partnership Act, the adjustment of losses follows this sequence: 1. First, from available profits. 2. Subsequently, from the capital contributions of the partners. 3. If any deficit remains, it is borne by the partners individually according to their profit-sharing ratio.

Step 2: Application to the Question.
(B) From profits → First priority.
(A) From capital → Second priority.
(C) Borne by partners individually in their profit ratio → Third priority.

Final Answer: \[\boxed{(B), (A), (C)}\]