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A, B and C share profits in the ratio 2:5:3. A retires, and B and C acquire A’s share in the ratio 3:2. What is the gaining ratio?

Answer and explanation

Correct answer: 3:2

The governing concept is that the gaining ratio records the relative additional shares acquired by the continuing partners. The question explicitly states that B and C acquire A’s retiring share in the ratio 3:2. Therefore B receives three units of the additional share for every two units received by C, so their gaining ratio is directly 3:2. No separate subtraction is needed because the acquisition ratio has already been provided. Option B is the old B:C ratio, option C contains A’s old proportion with B and does not measure the gain, and option D would imply equal acquisition, contrary to the stated 3:2 arrangement. Hence option A is unambiguous.

Related tags

Gaining RatioRetirementSpecified AcquisitionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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