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Question
The formula for calculating the sacrificing ratio is ______.
Options
New share − Old share
Old share − New share
Gaining Ratio − Old Ratio
Old Ratio − Gaining Ratio
MCQ
Fill in the Blanks
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Solution
The formula for calculating the sacrificing ratio is Old share − New share.
Explanation:
The sacrificing ratio is a concept used in partnership accounting when a new partner is admitted. When a new partner joins the firm, the existing partners must give up (sacrifice) a portion of their share of profits to accommodate the new partner’s share.
The formula helps to quantify exactly how much each old partner has given up:
Sacrificing Ratio = Old Share − New Share
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