Question

Rent is divided in _______ ratio while calculating pre incorporation profit

Answer 1

Rent is divided in time ratio while calculating pre incorporation profit

Answer 2

Time Ratio

Explanation:

• Because gains earned prior to incorporation are classified as capital profit, they cannot be given as dividends to incorporated firm shareholders.
• It can be used to depreciate assets or write off capital losses.
• In a nutshell, profit generated after the date of business purchase is referred to as 'Post-incorporation or Post-acquisition profit,' whereas profit obtained before to the date of business purchase is referred to as 'Pre-incorporation profit.'