Arrange the following statements in proper sequence in context of admission of partner.
A. Finalising terms for admission of new partner
B. Calculation of sacrificing/ gaining ratio
C. Finalising balance in partner's capital A/c
D. Calculation of new profit sharing ratio
E. Valuation and adjustment of goodwill
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A, D, B, E, C
Each step on admission needs the result of the one before it, so the order follows the book’s list of matters to be settled:
(A) Finalising terms for admission of new partner — first. The new partner’s share and capital are agreed.
(D) Calculation of new profit sharing ratio — second. The share of every partner after admission is worked out.
(B) Calculation of sacrificing/ gaining ratio — third. It compares each old partner’s old and new shares.
(E) Valuation and adjustment of goodwill — fourth. The new partner’s share of goodwill is credited to the sacrificing partners in the sacrificing ratio.
(C) Finalising balance in partner's capital A/c — last. The capitals are settled after all adjustments.
NCERT (2026-27 edition): NCERT (2026-27 edition):
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