Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

Outgoing partner is compensated for parting with firm's future profits in favour of remaining partners. The remaining partners contribute to such compensation in:

Options:

Gaining Ratio

Capital Ratio

Sacrificing Ratio

Profit-sharing Ratio

Correct Answer:

Gaining Ratio

Explanation:

The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called the gaining ratio.