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If a new partner receives a share of profit entirely from the share of only one existing partner, which feature of the new profit-sharing ratio is correct?

Answer and explanation

Correct answer: Only the sacrificing partner’s share decreases; the other existing partner’s share remains unchanged.

When the entire share of the incoming partner is given by one partner, that partner alone sacrifices profit share. Hence, only that partner’s share falls; other old shares stay unchanged. Exam tip: verify that the new shares add up to \(1\).

Related tags

AccountancyPartnership AdmissionNew Profit Sharing RatioSacrificing PartnerClass 12Reconstitution Admission Of A PartnerClass 12 Mcq

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