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A and B share profits in the old ratio of 4:3. If C is admitted and receives a \(\frac{2}{7}\) share entirely from A, what will be the sacrificing ratio of A and B?

Answer and explanation

Correct answer: A : B = 1 : 0

Sacrificing ratio = old profit share − new profit share. A sacrifices the entire \(\frac{2}{7}\) share given to C, while B sacrifices nothing. Therefore, the ratio is \(\frac{2}{7}:0 = 1:0\). Exam tip: If the incoming partner’s entire share is obtained from only one old partner, the sacrificing ratio is 1:0.

Related tags

GoodwillSacrificing-RatioPartnership-AccountsAdmissionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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