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If A's new share is more than his old share what is it for A?

Answer and explanation

Correct answer: Gain

The correct answer is A: gain. A partner's change in share is found by comparing the new share with the old share. If A's new share is greater than the old share, A receives an additional portion of future profits. That additional portion is called A's gain, and it is used in calculating the gaining ratio during reconstitution. Option A is correct because new share minus old share is positive. Option B, sacrifice, is the opposite: it occurs when the new share is smaller than the old share and the partner gives up part of the former entitlement. Option C, loss, is not the standard name for this change in partnership share; the partner has gained an entitlement, even though actual profit or loss later depends on business results. Option D, loan, is unrelated: a loan is borrowed money and is not a change in profit-sharing proportion. Memory cue: new share greater than old share means gain; new share smaller means sacrifice.

Related tags

GainNew ShareOld ShareGoodwill SettlementReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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