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When the entire profit share of a new partner is surrendered by only one existing partner, which statement about the new profit-sharing ratio is correct?

Answer and explanation

Correct answer: The existing partner who gives up no share retains an unchanged profit share

If the new partner receives the entire share from one partner, only that partner sacrifices profit. The partner making no sacrifice keeps the same share. In exams, compare old and new shares to identify the sacrificing partner.

Related tags

AccountancyPartnershipAdmission Of PartnerNew Profit Sharing RatioSacrificing RatioClass 12Reconstitution Admission Of A PartnerClass 12 Mcq

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