As per Section 48 of the Partnership Act 1932, which of the following will be utilized for payment of losses, including deficiencies of capital:

(A) Out of Profits

(B) Out of capital of Partners

(C) By partners individually in their profit sharing ratio

(D) Creditors Assets

Choose the correct answer from the options given below:

According to Section 48 of the Partnership Act 1932, losses including deficiencies of capital are paid in the following order:

First → Out of profits (if any available)

Second → Out of capital of the firm

Third → By partners individually in their profit sharing ratio (if profits and capital are insufficient)

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Analyzing each statement:

(A) Out of Profits - Correct. Losses are first adjusted against available profits.

(B) Out of capital of Partners - Correct. If profits are inadequate, capital is used to meet the losses.

(C) By partners individually in their profit sharing ratio - Correct. When both profits and capital fall short, partners must personally contribute in their profit sharing ratio.

(D) Creditors Assets - Incorrect. Creditors' assets cannot be used to pay firm's losses. Creditors are external parties to whom the firm owes money, not sources for meeting losses.

The correct combination is (A), (B) and (C) only.

Correct Option: 2