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On the admission of a new partner, what is the ratio of the portions of profit surrendered by the existing partners called?

Answer and explanation

Correct answer: Sacrificing ratio

The ratio of profit portions given up by existing partners in favour of the incoming partner is the sacrificing ratio. Use: sacrifice = old share − new share. Exam tip: do not confuse it with gaining ratio.

Related tags

AccountancyPartnershipAdmission Of PartnerSacrificing RatioProfit Sharing RatioClass 12New Profit Sharing RatioReconstitution Admission Of A Partner

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