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If the gaining ratio is 0:1, what is its simple meaning?

Answer and explanation

Correct answer: Only the second partner is gaining

A gaining ratio expresses how the additional share is distributed among the continuing partners. In the ratio 0:1, the first term is zero, so the first partner receives no part of the additional share. The second term is one, so the second partner receives the entire gain. This is therefore a one-sided gain, not an absence of gain for everyone. Option B reverses the order of the partners, option C would require a ratio such as 1:1, and option D incorrectly interprets the zero as total gainlessness. The zero applies only to the first partner. Consequently, only the second partner is gaining, and option A is correct.

Related tags

Gaining RatioRatio InterpretationRetirementNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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