[amp_mcq option1=”old ratio” option2=”new ratio” option3=”sacrificing ratio” option4=”gaining ratio” correct=”option3″]<\/p>\n
The correct answer is: C. sacrificing ratio<\/strong>.<\/p>\n The sacrificing ratio is the ratio in which the old partners give up their share of the partnership to the new partner. It is calculated by taking the difference between the old partners’ capital balances and the new partner’s capital balance, and dividing each difference by the total of the differences.<\/p>\n For example, if there are two old partners, A and B, with capital balances of $100,000 and $50,000, respectively, and a new partner, C, is admitted with a capital balance of $150,000, the sacrificing ratio would be:<\/p>\n A:B = ($100,000 – $150,000) \/ ($100,000 – $50,000) = 1:2<\/p>\n This means that A would give up $50,000 of his capital balance to C, and B would give up $25,000 of his capital balance.<\/p>\n The sacrificing ratio is used to determine how much each old partner will receive from the new partner in exchange for their share of the partnership. The new partner will pay the old partners in cash or by transferring assets to the partnership.<\/p>\n The sacrificing ratio is also used to determine how much each old partner’s capital balance will be adjusted after the admission of the new partner. The old partners’ capital balances will be adjusted by the amount of cash or assets they receive from the new partner, plus or minus their share of the goodwill.<\/p>\n Goodwill is an intangible asset that arises when a business is sold for more than the fair value of its net assets. When a new partner is admitted to a partnership, the goodwill of the partnership is usually increased. The old partners’ capital balances are then adjusted to reflect their share of the increased goodwill.<\/p>\n The sacrificing ratio is a key concept in partnership accounting. It is used to determine how much each old partner will give up to the new partner, and how much each old partner’s capital balance will be adjusted after the admission of the new partner.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”old ratio” option2=”new ratio” option3=”sacrificing ratio” option4=”gaining ratio” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-51418","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n