Question

Complete the following sentence.

______ is the ratio in which the remaining partners will share future profits after the retirement or death of any partner.

Options

• Old profit sharing ratio

• Sacrificing ratio

• New profit sharing ratio

• None of these

Answer 1

The new profit sharing ratio is the ratio in which the remaining partners will share future profits after the retirement or death of any partner.

Explanation:

The new profit sharing ratio is the proportion in which the surviving partners share future profits after a partner retires or dies. Each remaining partner's new share will be made up of his own share in the company plus the share obtained from the retiring deceased partner.