Question : Which of the following statements is incorrect?
Option 1: New Profit-sharing Ratio among remaining or continuing partners is same as their Old Profit-sharing Ratio.
Option 2: Gaining Ratio of remaining or continuing partners is same as their Old Profit-sharing Ratio.
Option 3: Gaining ratio is the ratio in which the remaining partners take the outgoing (retired or deceased) partner's share.
Option 4: None of the above
Correct Answer: Gaining Ratio of remaining or continuing partners is same as their Old Profit-sharing Ratio.
Solution : Answer = Gaining Ratio of remaining or continuing partners is the same as their Old Profit-sharing Ratio.
The incorrect statement is: "Gaining Ratio of remaining or continuing partners is the same as their Old Profit-sharing Ratio." The gaining ratio represents the adjustment in profit-sharing among remaining partners due to the outgoing partner's share. It may differ from their old profit-sharing ratio. The other statements are accurate regarding profit-sharing adjustments in partnerships. Hence, the correct option is 2.
Question : Which of the following statements is false?
Question : Unless agreed otherwise, it is presumed that the continuing partners gain in their _____________and hence their ___________is the same as their old profit-sharing ratio.
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