The ratio in which the old partners agree to sacrifice their share of profit in favour of the incoming partner is called ___________.

New profit sharing ratio

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Sacrificing ratio

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Gain ratio

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Old profit sharing ratio

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Solution

The correct option is A Sacrificing ratio
The ratio in which the old partners agree to sacrifice their share in profit in favour of the incoming partner is called sacrificing ratio. The sacrifice by a partner is equal to: Old Share of Profit - New Share of Profit. The ratio is normally given as agreed among the partners which could be the old ratio, equal sacrifice, or a specified ratio.

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Similar questions

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