Calculating Profit Sharing Ratios in Partnership Business

What happens to the profit-sharing ratio when a new partner is admitted?

• It only changes for the new partner.

• It remains the same.

• It increases for all partners.

• It decreases for existing partners.

How is the sacrifice ratio calculated?

• New ratio minus old ratio

• Old ratio minus new ratio

• Sum of old and new ratios

• Difference between old and new ratios

What is the gain ratio?

• The ratio of profit shared by a new partner

• The ratio of profit gained by existing partners when a partner retires

• The ratio of profit lost by existing partners

• The ratio of profit shared equally among all partners

What is the relationship between sacrificing and gaining ratios?

• Sacrificing ratio is for new partners, gaining ratio is for retiring partners.

• They are unrelated.

• Gaining ratio is for new partners, sacrificing ratio is for retiring partners.

• They are always equal.

In a scenario where a new partner is admitted for a specific share, how is the remaining profit distributed?

• Equally among all partners

• According to the old ratio among existing partners

• Only to the new partner

• Randomly among all partners

If partners agree to surrender a portion of their shares, how is the new ratio determined?

• By subtracting the surrendered shares from the old ratio

• By dividing the old ratio by the surrendered shares

• By adding the surrendered shares to the new partner's share

• By multiplying the old ratio by the surrendered shares

What is the significance of the sacrifice made by old partners?

• It determines the new partner's share.

• It increases the old partners' profit.

• It has no impact on the new partner's share.

• It decreases the new partner's share.