Consider the following and select the correct statements
(A) The ratio in which the continuing partners acquire the outgoing partner's share is called the Gaining Ratio.
(B) The ratio in which the continuing partners acquire the outgoing partner's share is called the Sacrificing Ratio.
(C) In the event of the death of a partner, the amount of general reserve is transferred to partners' capital accounts in the new profit sharing ratio.
(D) On the admission of a new partner, the old partnership is dissolved.
Choose a pair of correct statements from the given options below.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A) & (D) only
(A) The ratio in which the continuing partners acquire the outgoing partner's share is called the Gaining Ratio. Correct. Each continuing partner's gain is his new share less his old share.
(B) The ratio in which the continuing partners acquire the outgoing partner's share is called the Sacrificing Ratio. Incorrect. The sacrificing ratio is the ratio in which old partners give up their share for a new partner. Continuing partners on a retirement or death gain, they do not sacrifice.
(C) In the event of the death of a partner, the amount of general reserve is transferred to partners' capital accounts in the new profit sharing ratio. Incorrect. The reserve was earned with the deceased partner in the firm, so it goes to all partners in the old ratio.
(D) On the admission of a new partner, the old partnership is dissolved. Correct. The old agreement ends and a new one takes its place, which is a dissolution of the partnership; the firm itself carries on.
NCERT (2026-27 edition): NCERT (2026-27 edition): NCERT (2026-27 edition):
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