Question

Gain ratio is calculated at the time of admission of new partner.

Options

• Agree

• Disagree

Answer 1

I Disagree with the given statement.

Explanation:

The gain ratio is calculated at the time of retirement or death of a partner, not during the admission of a new partner. It represents the share of profit gained by the remaining partners when an existing partner exits the firm. During the admission of a new partner, the sacrifice ratio is calculated instead, which shows the proportion of profit surrendered by the old partners.