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What is the ratio in which all partners share future profits and losses after the admission of a new partner called?

Answer and explanation

Correct answer: Ratio for sharing profits and losses among all partners after admission

The new profit-sharing ratio is the ratio in which all partners, including the newly admitted partner, share future profits and losses after admission. It is different from the old profit-sharing ratio and from the partners’ capital ratio. Exam tip: the new ratio applies from the date of admission and includes the new partner.

Related tags

Admission Of PartnerNew Profit Sharing RatioPartnership AccountsClass 12 AccountancyProfit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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