Question

10. At the time of admission of a new
partner, new profit-sharing ratio is
ascertained. The new of incoming
partner acquires the share from old
partners and as a result profit share
of old partners is reduced. What is it
known as and why is it important to
ascertain it?​

Answer 1

Explanation:

The reduced part of the profit-sharing ratio of the old partners is know as Sacrificing Ratio. It is important to determine the sacrificing ratio because of the reason that the new partners will have a share in an existing frim for which he compensates by paying goodwill to the sacrificing partners in the sacificing ratio

Answer 2

Answer:

The reduced part of the profit-sharing ratio of the old partners is know as Sacrificing Ratio. It is important to determine the sacrificing ratio because of the reason that the new partners will have a share in an existing frim for which he compensates by paying goodwill to the sacrificing partners in the sacificing ratio.