02-10-2010, 01:33 AM
Dear sehrish khan there z no concept behind this statement so don't get confused urself with dis...
As u know in partnership firm partners may take part in conducting business of the firm for which they are given salaries,commision etc.such salaries r nt expenses of the firm but r given out of the profits.
One partner may contribute more efforts than others.As in dis case C says dat his efforts were more than that of A & B so their salaries should be reduced by 30%.If we reduce it da profit to b distributed will increase nd dat increment in profit s credited in partners' capital accounts in P/L sharing ratio.
Hope it will be clear now...
As u know in partnership firm partners may take part in conducting business of the firm for which they are given salaries,commision etc.such salaries r nt expenses of the firm but r given out of the profits.
One partner may contribute more efforts than others.As in dis case C says dat his efforts were more than that of A & B so their salaries should be reduced by 30%.If we reduce it da profit to b distributed will increase nd dat increment in profit s credited in partners' capital accounts in P/L sharing ratio.
Hope it will be clear now...
