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Question
How is gain ratio calculated?
Solution
When a partner retires, the remaining partners gain in terms of the profit-sharing ratio. This gain is called the Gaining Ratio. When a partner retires, remaining partners distribute his share of profit among themselves.
Gain Ratio: When a partner retires, the remaining partners gain in terms of the profit-sharing ratio.
This gain is called the Gain Ratio.
Formula used in gaining ratio
Gaining ratio = New ratio - Old ratio
New Ratio = Old + Gain
Gaining ratio = Retiring partner's share × Acquisition Ratio
New Ratio = Old Ratio + Gaining Ratio
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RELATED QUESTIONS
When is gain ratio required to be calculated ?
The proportion in which the continuing partners are benefitted due to retirement of a partner.
Answer in one sentence only.
What is gaining ratio?
Answer in one sentence only.
When is the gaining ratio to be calculated?
State whether the following statements is true or false :
Gaining ratio means old ratio minus new ratio.
Answer in one Sentence :
What is gaining ratio or benefit ratio?
Answer in one Sentence :
How is gaining ratio calculated?
Answer in one Sentence :
When is gaining ratio required to be calculated?
Select the most appropriate answer from the alternatives given below :
Gaining ratio is calculated on ___________.
