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A, B and C share profits in the ratio 8:4:3. When C retires, A and B continue to share profits in their old ratio. What is the new ratio of A and B in its simplest form?

Answer and explanation

Correct answer: 2:1

After C retires, C’s share is removed, leaving A and B in the ratio 8:4. Dividing both terms by their greatest common divisor, 4, gives the simplified ratio 2:1. Therefore, option A is correct. Exam tip: When the remaining partners continue in their old ratio, simplify only their original ratio.

Related tags

Partner RetirementNew Profit Sharing RatioOld Ratio SimplificationPartnership AccountsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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