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What is the meaning of change in the profit sharing ratio:
  • a)
    In which all partner including the new partner share future profit and loss
  • b)
    Purchase of shares of profit by one partner form another partner
  • c)
    In which all partner including the deceased partner executor partner share future profit and loss
  • d)
    In which all partner including the retired partner share future profit and loss
Correct answer is 'B'. Can you explain this answer?
Verified Answer
What is the meaning of change in the profit sharing ratio:a)In which a...
Sometimes, the partners of a firm may agree to change their existing profit sharing ratio. As a result of this, some partners will gain in future profits while others will lose. In such a situation, the partner who gains by change in profit sharing ratio must compensate the partner who has made the sacrifice. In simple words, it is also known as purchase of shares of profit by one partner form another partner.
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What is the meaning of change in the profit sharing ratio:a)In which a...
Change in profit sharing ratio means purchase of share by one partner from other partner or we can say that one partner sacrifice is share of profit in favour of other partner...
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What is the meaning of change in the profit sharing ratio:a)In which a...
Option B is correct becz whenever there is change in the profit sharing ratio which happens at the time of reconstitution of partnership due to any reasons(admission of partners..retirement...or death... etc)...In that case,the new partner has to take it's share from the existing partners.It means the some of the or all of the existing partners has to sacrifice a part of their share which shows that new partner is purchasing the part share of old partner.In case of retirement also the share of retired partner is being purchased by the continuing partners.
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What is the meaning of change in the profit sharing ratio:a)In which all partner including the new partner share future profit and lossb)Purchase of shares of profit by one partner form another partnerc)In which all partner including the deceased partner executor partner share future profit and lossd)In which all partner including the retired partner share future profit and lossCorrect answer is 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What is the meaning of change in the profit sharing ratio:a)In which all partner including the new partner share future profit and lossb)Purchase of shares of profit by one partner form another partnerc)In which all partner including the deceased partner executor partner share future profit and lossd)In which all partner including the retired partner share future profit and lossCorrect answer is 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the meaning of change in the profit sharing ratio:a)In which all partner including the new partner share future profit and lossb)Purchase of shares of profit by one partner form another partnerc)In which all partner including the deceased partner executor partner share future profit and lossd)In which all partner including the retired partner share future profit and lossCorrect answer is 'B'. Can you explain this answer?.
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