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Question
State whether the following statement is true or false with reason.
Gain ratio means New ratio minus Old ratio.
Options
True
False
Solution
Gain ratio means New ratio minus Old ratio. - True
Explanation:
As per definition, the profit-sharing ratio which is acquired by the continuing partners from the retiring partner is called gain ratio. If the gain ratio added to the old ratio we will get New ratio. It means New ratio = Old ratio + Gain ratio by interchanging the terms, we will get Gain ratio = New ratio – Old ratio.
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| Balance Sheet as on 31st March, 2020 | ||||
| Liabilities | Amount ₹ | Assets | Amount ₹ | |
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New ratio (less) ______ = Gain ratio
New Ratio (less) _____ = Gain ratio
New Ratio (less) ______ = Gain ratio
New Ratio (less) ______ = Gain ratio
New Ratio (less) ______ = Gain ratio
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