1) Give one reason for change in P&L ratio among Partners?
2) What do you mean by sacrifice of a Partner?
3) What is reconstruction of partnership?
4) At the time of reconstruction of partnership, accumulated amount of profit will be credited
to which account and which side?
5) Give mathematical equation for gain ratio.
Answers
Answer:
) Give one reason for change in P&L ratio among Partners?
2) What do you mean by sacrifice of a Partner?
3) What is reconstruction of partnership?
4) At the time of reconstruction of partnership, accumulated amount of profit will be credited
to which account and which side?
5) Give mathematical equation for gain ratio.
1) To ascertain the actual position of the firm. Profit and loss arriving on account of such revaluation up to the date of reconstitution may be adjusted in the partner's capital accounts in their sacrificing ratio.
2)The meaning of sacrifice ratio in accounting can be explained as the proportion in which existing partners surrender their share of profit in favour of newly admitted partners. The share thus sacrificed is usually given to new partners by either some existing partners or all of them.
3)The partnership is an agreement between two or more persons for sharing the profits of a business carried on by all or any one of them acting for all. Any change in the existing agreement is known as reconstitution of the partnership firm.
5)Gaining ratio is a type of financial tool that is helps in determining the proportion by which the remaining partners of a firm will share the profits of an existing partner in the event of his death or retirement. The ratio by which they share the profits is known as gaining ratio.