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Question
On what occasions sacrificing ratio is used?
Solution
The following are the different situations when sacrificing ratio is used.
1. When the existing partners of a partnership firm agree to change the share of profit among themselves.
2. When a new partner is admitted in the partnership firm and the amount of the goodwill brought by him/her is transferred among the old partners in sacrificing ratio of the old partners.
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Sacrifice Ratio = ____________
Change in profit-sharing ratio of existing partners results in:
