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How sacrificing ratio is differ from gaining ratio on the basis of mode of calculation
- a)It is calculated by taking difference between gaining and new ratio
- b)It is calculated by taking difference between new and old ratio
- c)It is calculated by taking difference between old and new ratio
- d)It is calculated by taking difference between old and gaining ratio
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
How sacrificing ratio is differ from gaining ratio on the basis of mod...
Difference between Sacrificing Ratio and Gaining Ratio
Sacrificing ratio and gaining ratio are two types of ratios that are used in partnership accounting. They are used to calculate the changes in the ownership structure of a partnership due to the admission, retirement or death of a partner.
Sacrificing Ratio
The sacrificing ratio is the ratio in which the old partners sacrifice their share of profits to the incoming partner. It represents the ratio in which the old partners agree to give up their share of profits to the new partner. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio.
Formula: Sacrificing Ratio = Old Ratio - New Ratio
Gaining Ratio
The gaining ratio is the ratio in which the incoming partner gains the share of profits from the old partners. It represents the ratio in which the new partner is entitled to share the profits of the partnership. The gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
Formula: Gaining Ratio = New Ratio - Old Ratio
Mode of Calculation
The main difference between the sacrificing ratio and the gaining ratio is the mode of calculation. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio, while the gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
Conclusion
In conclusion, the sacrificing ratio and the gaining ratio are two important ratios in partnership accounting. The sacrificing ratio represents the ratio in which the old partners sacrifice their share of profits to the incoming partner, while the gaining ratio represents the ratio in which the incoming partner gains the share of profits from the old partners. The main difference between the two ratios is the mode of calculation. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio, while the gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
Sacrificing ratio and gaining ratio are two types of ratios that are used in partnership accounting. They are used to calculate the changes in the ownership structure of a partnership due to the admission, retirement or death of a partner.
Sacrificing Ratio
The sacrificing ratio is the ratio in which the old partners sacrifice their share of profits to the incoming partner. It represents the ratio in which the old partners agree to give up their share of profits to the new partner. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio.
Formula: Sacrificing Ratio = Old Ratio - New Ratio
Gaining Ratio
The gaining ratio is the ratio in which the incoming partner gains the share of profits from the old partners. It represents the ratio in which the new partner is entitled to share the profits of the partnership. The gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
Formula: Gaining Ratio = New Ratio - Old Ratio
Mode of Calculation
The main difference between the sacrificing ratio and the gaining ratio is the mode of calculation. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio, while the gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
Conclusion
In conclusion, the sacrificing ratio and the gaining ratio are two important ratios in partnership accounting. The sacrificing ratio represents the ratio in which the old partners sacrifice their share of profits to the incoming partner, while the gaining ratio represents the ratio in which the incoming partner gains the share of profits from the old partners. The main difference between the two ratios is the mode of calculation. The sacrificing ratio is calculated by taking the difference between the old ratio and the new ratio, while the gaining ratio is calculated by taking the difference between the new ratio and the old ratio.
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How sacrificing ratio is differ from gaining ratio on the basis of mod...
(1)Sacrificing Ratio....The ratio in which the existing partners agree to sacrifice their share of profits in favour of the INCOMING PARTNER is called the sacrificing ratio. ... Then, the existing partner's new ratiois calculated by dividing the remaining share of the profit in their existing ratio.(Old PSR-New PSR)(2)Gaining Ratio. ... The ratio, in which the continuing partners acquired the share of RETIRING PARTNER, is called as gaining ratio. Note: When the ratio among the continuing partners remains unchanged, the gaining ratio will be equal to the new ratio.
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How sacrificing ratio is differ from gaining ratio on the basis of mode of calculationa)It is calculated by taking difference between gaining and new ratiob)It is calculated by taking difference between new and old ratioc)It is calculated by taking difference between old and new ratiod)It is calculated by taking difference between old and gaining ratioCorrect answer is option 'B'. Can you explain this answer?
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