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

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Question

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

Options

  • Gaining Ratio

  • Sacrificing Ratio

  • Capital Ratio

  • Profit-Sharing Ratio

MCQ

Solution

Gaining Ratio

Explanation:

Retiring partners are compensated in a gaining ratio by the surviving partners for giving up a portion of the firm's future profits in favour of the remaining partner.

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Retirement and Death of a Partner - Gaining Ratio
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