Question

Sacrifice by a partner is equal to ________________.

• A. Old Share of Profit - New Share of Profit
• B. Old Share of Profit + New Share of Profit
• C. New Share of Profit - Old Share of Profit
• D. Old Share of Profit X New Share of Profit

Answer 1

Answer: (A)

Old Share of Profit - New Share of Profit

Sacrificing ratio is the ratio in which the old partners agree to share profits in favour of the incoming partner. The sacrifice by a partner is =

Old Share of Profit - New Share of Profit

The new partner is required to compensate the old partner's for their loss of share in the super profits of the firm for which he brings in an additional amount known as premium. This amount is shared by the existing partners in the ratio in which they forego their shares in favour of the new partner which is called sacrificing ratio.