Match List – I with List – II.

Choose the correct answer from the options given below :

(A)-(I), (B)-(II), (C)-(III), (D)-(IV)

The correct answer is Option (1) - (A)-(I), (B)-(II), (C)-(III), (D)-(IV).

* Gaining Ratio- Partner acquire the share from other partner. When a partner retires from a partnership, the gaining ratio is used to determine the new profit-sharing ratio among the remaining partners. The gaining ratio is calculated by deducting old ratio from new ratio. The retiring or deceased partner is entitled to his share of goodwill at the time of retirement/death because the goodwill has been earned by the firm with the efforts of all the existing partners. 

* Old Ratio- Ratio decided by partner before Reconstitution. Old ratio is that ratio in which partners used to share profits before reconstitution. This ratio will be changed after reconstitution.

* Sacrificing Ratio- Partner surrender his share to other partners.  Sacrificing ratio is calculated at the time of admission of a new partner because old partners sacrifice some of their share in profit in favor of new partner. It is the ratio in which any partner sacrifice their share of profit in favour of new partner. It is calculated by subtracting new share from old share.

* New Ratio- Partners decided to share future profits and losses. The ratio in which partners are going to share profits and losses in future is called new ratio. This ratio is calculated after adding gaining share or deducting sacrificing ratio from the old share.