Question : The sacrifice ratio is calculated using the following formula -
Option 1: New share – Old share
Option 2: Old Ratio – Gaining Ratio
Option 3: Gaining Ratio – Old Ratio
Option 4: Old share – New share
Answer (1)
20th Jan, 2024
Correct Answer: Old share – New share
Solution : Sacrificing Ratio = Old Ratio − New Ratio
Calculating this ratio is crucial because the new partner must make up for the previous partners' loss of their profit-sharing interest.
Hence the correct answer is option 4.
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