Question

Sacrificing ratio is calculated in the case of –
(A) Retirement of a partner
(B) Death of a partner
(C) Insolvency of partner
(D) Admission of a partner

Answer 1

Answer:

a) Admission of a partner

When a new partner comes into the business, old partners have to give him his profit share from their portion. Thus change in profit sharing ratio is an important aspect to be considered on reconstitution by admission. The existing partners may decide to change their profit sharing ratio for various reasons. When the profit sharing ratio is revised among existing partners, there ought to be a partial sacrifice of profit share by some partners in favour of others. The sacrifice of one or a group of partners becomes the gain of the remaining partners. Following is the formula for calculating sacrificing ratio:

Sacrificing ratio = Old ratio – new ratio

Explanation:

mark me as brainlist please