Question on: JAMB Accounting - 2023

Changes in the profit-sharing ratio in a partnership can occur due to several reasons:

I. Skill contributed by partners: When partners bring different skills, experience, or expertise to the partnership, it can lead to a change in the profit-sharing ratio. For example, if one partner significantly increases their contribution in terms of skills, they may be entitled to a higher share of the profits.

II. Health status: The health status of a partner may not directly lead to a change in the profit-sharing ratio. Generally, health status does not affect the distribution of profits among partners unless it prevents a partner from actively participating in the business, in which case a change in the ratio might occur.

III. Old age: Old age alone doesn't typically lead to a change in the profit-sharing ratio. However, if an older partner decides to reduce their involvement in the business or retire, it could result in a change in the profit-sharing arrangement.

IV. Intangible asset increase: An increase in intangible assets, such as patents, trademarks, or intellectual property, can potentially lead to a change in the profit-sharing ratio. If a partner contributes significantly to the acquisition or development of such assets, they may be entitled to a larger share of the profits generated from them.

Therefore, options I, II, and IV are the factors that can lead to changes in the profit-sharing ratio.