Question

(b) Profit & Loss Sharing Ratio
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Answer 1

Explanation:

A and B share profits and losses in the ratio of 3 : 1, C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is: (a) equal (b) 3 : 1 (c) 2 : 1 (d) 3 : 2.

Answer 2

The ratio in which the profits or losses of a business are shared. For a partnership, the profit-sharing ratios will be set out in the partnership agreement. ... If no specific agreement has been made, profits and losses will be shared equally in accordance with the Partnership Act 1890.