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What is gaining ratio:
- a)In which profit sharing ratio of sacrificing partners decrease
- b)In which profit sharing ratio of gaining partners decrease
- c)In which profit sharing ratio of sacrificing partners increase
- d)In which profit sharing ratio of gaining partners increase
Correct answer is 'D'. Can you explain this answer?
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What is gaining ratio:a)In which profit sharing ratio of sacrificing p...
Gaining Ratio is calculated at the time of retirement or death of partner. It is the excess of new ratio over old ratio of old partners except retired or deceased partner. Formula : Gaining Ratio = New Ratio - Old
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What is gaining ratio:a)In which profit sharing ratio of sacrificing p...
Gaining Ratio in Partnership
Gaining ratio is the ratio in which the continuing partners in a partnership firm gain the share of the outgoing partner. It is calculated when a partner leaves the firm and his share is transferred to the remaining partners.
The gaining partners are the ones who gain the share of the outgoing partner. The sacrificing partner is the one who is leaving the business and his share is being transferred to the remaining partners.
Gaining Ratio Calculation
Gaining ratio is calculated by dividing the share of the outgoing partner by the total remaining shares of the partners. For example, if an outgoing partner has a share of 20% and the remaining partners have a total share of 80%, the gaining ratio will be 20/80 or 1/4.
Effect of Gaining Ratio
The gaining ratio affects the profit sharing ratio of the partners in the firm. The impact of the gaining ratio on the profit sharing ratio of the partners is as follows:
A) In which profit sharing ratio of sacrificing partners decrease
When a sacrificing partner leaves the firm, his share is transferred to the remaining partners. This increases the total share of the remaining partners, which in turn reduces the profit sharing ratio of the sacrificing partners.
B) In which profit sharing ratio of gaining partners decrease
The gaining ratio is the ratio in which the continuing partners gain the share of the outgoing partner. If the gaining ratio is high, the profit sharing ratio of the gaining partners will be reduced as they have to share the profits with the outgoing partner's share.
C) In which profit sharing ratio of sacrificing partners increase
The profit sharing ratio of sacrificing partners cannot increase as their share is being transferred to the remaining partners.
D) In which profit sharing ratio of gaining partners increase
The profit sharing ratio of gaining partners will increase if the gaining ratio is low. This means that the outgoing partner's share is small compared to the total shares of the remaining partners. In this case, the gaining partners will have a larger share of profits after the outgoing partner leaves.
Conclusion
Gaining ratio is an important concept in partnership accounting. It affects the profit sharing ratio of the partners in the firm. The gaining ratio can increase or decrease the profit sharing ratio of the partners depending on the share of the outgoing partner and the total remaining shares of the partners.
Gaining ratio is the ratio in which the continuing partners in a partnership firm gain the share of the outgoing partner. It is calculated when a partner leaves the firm and his share is transferred to the remaining partners.
The gaining partners are the ones who gain the share of the outgoing partner. The sacrificing partner is the one who is leaving the business and his share is being transferred to the remaining partners.
Gaining Ratio Calculation
Gaining ratio is calculated by dividing the share of the outgoing partner by the total remaining shares of the partners. For example, if an outgoing partner has a share of 20% and the remaining partners have a total share of 80%, the gaining ratio will be 20/80 or 1/4.
Effect of Gaining Ratio
The gaining ratio affects the profit sharing ratio of the partners in the firm. The impact of the gaining ratio on the profit sharing ratio of the partners is as follows:
A) In which profit sharing ratio of sacrificing partners decrease
When a sacrificing partner leaves the firm, his share is transferred to the remaining partners. This increases the total share of the remaining partners, which in turn reduces the profit sharing ratio of the sacrificing partners.
B) In which profit sharing ratio of gaining partners decrease
The gaining ratio is the ratio in which the continuing partners gain the share of the outgoing partner. If the gaining ratio is high, the profit sharing ratio of the gaining partners will be reduced as they have to share the profits with the outgoing partner's share.
C) In which profit sharing ratio of sacrificing partners increase
The profit sharing ratio of sacrificing partners cannot increase as their share is being transferred to the remaining partners.
D) In which profit sharing ratio of gaining partners increase
The profit sharing ratio of gaining partners will increase if the gaining ratio is low. This means that the outgoing partner's share is small compared to the total shares of the remaining partners. In this case, the gaining partners will have a larger share of profits after the outgoing partner leaves.
Conclusion
Gaining ratio is an important concept in partnership accounting. It affects the profit sharing ratio of the partners in the firm. The gaining ratio can increase or decrease the profit sharing ratio of the partners depending on the share of the outgoing partner and the total remaining shares of the partners.
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What is gaining ratio:a)In which profit sharing ratio of sacrificing p...
Gaining ratio is actually the ratio driven out by applying the formula (New Share - Old Share). Here, by applying the above formula we will find two things. First is the gaining partner and others are sacrificing ones. The Gaining ones are those whose share will also be gained thats why the profits of the gaining partner will increase.
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What is gaining ratio:a)In which profit sharing ratio of sacrificing partners decreaseb)In which profit sharing ratio of gaining partners decreasec)In which profit sharing ratio of sacrificing partners increased)In which profit sharing ratio of gaining partners increaseCorrect answer is 'D'. Can you explain this answer?
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