If a Partnership Agreement Does Not Fix the Ratio of Sharing

question 9

True/False

If a partnership agreement does not fix the ratio of sharing the profits and the losses, they are to be shared in proportion to the contribution of capital.

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Definitions:

Diminishing-Balance Method

A method of accelerated depreciation where an asset loses value by a fixed percentage each year over its useful life.

Constant Percentage

A fixed rate applied over time or across instances, often used in calculation methods or financial formulas.