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If old partners give the new partner's share in (3:1) then what is the sacrificing ratio?

Answer and explanation

Correct answer: (3:1)

The direct answer is C, (3:1). Sacrificing ratio means the ratio in which the existing partners reduce their own profit shares to give a share to the incoming partner. The statement already says that the old partners give this share in 3:1, so their sacrifice is 3 parts by the first partner and 1 part by the second partner. Option A, (1:3), reverses the stated order and is therefore incorrect. Option B, old ratio, is not necessarily correct because the old profit-sharing ratio and the sacrifice ratio are different ideas. Option C, (3:1), exactly repeats the stated giving ratio and is correct. Option D, equal ratio, would apply only if both old partners surrendered equal amounts. Memory cue: “Sacrifice follows the way the new partner receives.”

Related tags

AdmissionNew-Profit-Sharing-RatioClass-12

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