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If a new partner receives their entire share of profit solely from one existing partner’s share, which statement about the new profit-sharing ratio is correct?

Answer and explanation

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

When the new partner receives the full share from only one partner, that partner alone sacrifices. In the new ratio, subtract the new partner’s share from that partner’s old share; the other partner’s share is unchanged. Exam tip: identify the sacrificing partner first.

Related tags

AccountancyPartnershipReconstitutionAdmission Of PartnerNew Profit Sharing RatioSacrificing RatioReconstitution Admission Of A PartnerClass 12 Mcq

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