On death of a partner, the remaining partner who have gained due to change in profit-sharing ratio should compensate whom?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Remaining partners (who have sacrificed) as well as deceased partner.
On retirement/death of a partner, the remaining partner who have gained due to change in profit sharing ratio should compensate the retired/ deceased partner as well as existing partners who have sacrificed. Due to change in profit sharing ratio some partner also sacrifice instead of gain so gaining partner have to compensate those sacrificing partners along with deceased partner as sacrificing partner's share in profit is reduced in future due to change in profit sharing ratio.