Question

state the purposes for which sacrificing ratio and gaining ratio is calculated. Plz answer 5 points .​

Answer 1

Sacrificing ratio is calculated for the distribution of goodwill among two partners and gaining ratio shows how much a partner gains

Answer 2

Sacrificing Ratio & Gaining Ratio. The main purpose of calculating this is to determine the amount of compensation to be paid by the Gaining partner to the sacrificing partner (usually paid on the basis of proportionate amount of Goodwill). Example: A and B were partners in a firm sharing profits in the ratio of 5:3.