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If the remaining partners acquire the retiring partner’s share in the ratio of 4:1, what will be their gaining ratio?

Answer and explanation

Correct answer: 4:1

The gaining ratio is the ratio in which the remaining partners acquire the retiring partner’s share of profit. Since the share is acquired in the ratio 4:1, the gaining ratio is 4:1. The new ratio and old ratio are different concepts and cannot be determined from this information alone. Exam tip: In retirement questions, gaining ratio equals the ratio of the share gained by the remaining partners.

Related tags

Gaining RatioPartner RetirementReconstitution Of PartnershipAccountancy BasicsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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