Question

Complete the following sentence.

"The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called ______"

Options

• Old profit sharing ratio

• Sacrificing ratio

• New profit sharing ratio

• Gaining ratio

Answer 1

"The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called Gaining ratio."

Explanation:

The gaining ratio is the ratio in which the continuing partners have gained the share from the retiring/deceased partner. In most cases, continuing partners acquire the share of retiring/deceased partners in their old profit sharing ratio. In that situation, the surviving partners' gaining ratio will be the same as their old profit sharing ratio among them, and the gaining ratio will not need to be computed.