Question

what increases at the time of admission of a new partner?
1.current liabilities
2.fixed liabilities
3.profit sharing ratio
4.none of these​

Answer 1

Answer:

option B is the correct answer for your question

Explanation:

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Answer 2

We need to know what increases at the time of admission of a new partner

• Let us take the options one by one and analyze them
• 'current liabilities ' are the liabilities that the firm has to pay in the near future
• This amount will not increase at the time of the admission of a new partner  
• ' Fixed liabilities' are the liabilities that are of a fixed nature
• This amount will not increase at the time of the admission of a new partner  
• 'profit-sharing ratio' will increase when a new partner is admitted to the firm
• The reason for this is when a partner is admitted he will bring funds with him and so there will be an increase in the profit-sharing ratio