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Admission of New Partner

Sacrificing r...

Question

Sacrificing ratio is used at the time of _____________ .

A

Admission of a partner

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B

Retirement of a partner

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C

Death of a partner

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D

Dissolution of firm

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Solution

The correct option is A Admission of a partner
When a partner is 'admitted' only then sacrificing ratio is used.
Sacrificing ratio is calculated only for the existing partners to check the proportion in which they would sacrifice their share for the new partner.
Note: An incoming partner can acquire the share either by purchasing it from the exiting partner/s or by contributing to the assets of the firm.

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