At the time of retirement of a partner, the difference between the old Profit Sharing Ratio and the new Profit Sharing Ratio is a negative outcome for a remaining partner. It indicates that :

Remaining partner is gaining

The correct answer is option 1- Remaining partner is gaining.

In accounting, we use two formulas to check the change in a partner's position:

1. Gaining Ratio = New Ratio $-$ Old Ratio

2. Sacrificing Ratio = Old Ratio $-$ New Ratio

The question explicitly asks about the outcome of: $$\text{Old Profit Sharing Ratio}-\text{New Profit Sharing Ratio}$$

• If the result is Positive: The partner's old share was bigger than their new share. This means they are Sacrificing.

• If the result is Negative: The partner's new share is bigger than their old share. This means they are Gaining.

Since the outcome is negative, it means the New Ratio is greater than the Old Ratio ($New>Old$). Therefore, the remaining partner has acquired more share than they had before.

Correct Answer: Option 1 : Remaining partner is gaining