Question : Existing Old Profit Share plus Acquired Profit Share is_____________.
Option 1: Old ratio
Option 2: New profit sharing ratio
Option 3: Gaining ratio
Option 4: None of the above
Answer (1)
25th Jan, 2024
Correct Answer: New profit sharing ratio
Solution : Answer = New profit sharing ratio
Existing (Old) Profit Share plus Acquired Profit Share is the New Profit Sharing Ratio. When a new partner is admitted to a partnership, the profit-sharing ratio of the existing partners may change, and the total profit-sharing ratio after admission is referred to as the new profit-sharing ratio.
New profit sharing ratio = Old share + Acquired share of profit.
Hence, the correct option is 2.
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