Match List – I with List – II. List - I(Name of ratios) List - II(Use… | Accountancy Part A CUET question

Match List – I with List – II.

List - I (Name of ratios)	List - II (Used for)
(A) Old Ratio	(I) Distribution of premium for goodwill
(B) New Ratio	(II) For adjustment of goodwill in death of partner
(C) Sacrificing Ratio	(III) Sharing revaluation profits
(D) Gaining Ratio	(IV) Sharing future profits

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Each ratio in reconstitution has its own job: the old ratio settles what was earned before the change, the new ratio what will be earned after it, and the sacrificing and gaining ratios measure who gives up and who gains a share.

(A) Old Ratio — this matches (III) Sharing revaluation profits. The gain or loss on revaluation belongs to the period before the change, so it is transferred to the old partners in their old profit sharing ratio.

(B) New Ratio — this matches (IV) Sharing future profits. The new profit sharing ratio is the ratio in which the partners share future profits after the change.

(C) Sacrificing Ratio — this matches (I) Distribution of premium for goodwill. The premium for goodwill brought by a new partner compensates the old partners for what they give up, so it is shared in the sacrificing ratio.

(D) Gaining Ratio — this matches (II) For adjustment of goodwill in death of partner. The continuing partners who gain the deceased (or retiring) partner’s share pay for his share of goodwill in their gaining ratio.

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… For this purpose the firm has to prepare the Revaluation Account. The gain or loss on revaluation of each asset and liability is transferred to this account and finally its balance is transferred to the capital accounts of the old partners in their old profit sharing ratio.”

NCERT (2026-27 edition):
New Profit Sharing Ratio – “New profit sharing ratio is the ratio in which the remaining partners will share future profits after the retirement or death of any partner.”

NCERT (2026-27 edition):
Sacrificing Ratio – “… As stated earlier, the new partner is required to compensate the old partner’s for their loss of share in the super profits of the firm for which he brings in an additional amount as premium for goodwill. This amount is shared by the existing partners in the ratio in which they forgo their shares in favour of the new partner which is called sacrificing ratio.”

NCERT (2026-27 edition):
When goodwill does not appear in the books – “When goodwill does not appear in the books of the firm, credit is given to the retiring partner for the share in goodwill by debiting the goodwill account to gaining partners capital accounts (individually) in their gaining ratio.”