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.
According to Section 48 of the Partnership Act, losses are to be adjusted in the following order: 1. First out of profits, if any. 2. Then out of the capital of partners. 3. Finally, if still unpaid, borne by partners individually in their profit sharing ratio.

Step 2: Apply to the question.
(B) Out of profits → First.
(A) Out of capital → Second.
(C) By partners individually in their profit ratio → Third.

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