Partnership

Retirement/Death

Easy

common

The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called:

New profit sharing ratio

Gaining ratio

Sacrificing ratio

Old profit sharing ratio

✅ Correct Option: 2

When a partner retires or dies from a partnership firm, their share in profits is taken over by the continuing partners. The ratio in which the continuing partners acquire this share is called the Gaining Ratio.

Gaining Ratio = New Profit Share - Old Profit Share

This ratio is crucial because:

The continuing partners must compensate the retiring/deceased partner (or their legal heirs) for the share they are acquiring. This is done by paying their share of goodwill and accumulated profits in their gaining ratio.

Distinguishing between different ratios:

Old Profit Sharing Ratio: The ratio in which partners shared profits before retirement/death

New Profit Sharing Ratio: The ratio in which continuing partners will share profits after retirement/death

Gaining Ratio: The ratio in which continuing partners acquire the outgoing partner's share (New Share - Old Share)

Sacrificing Ratio: Used when a new partner is admitted; existing partners give up a portion of their share (Old Share - New Share)

Since the question specifically mentions "acquiring share from retiring/deceased partner," the correct answer is Gaining Ratio.

2026: 13 May Shift 1

Arrange the following in the correct sequence related to adjustment of partners' capitals in case of retirement of a partner :-

(A) Calculation of cash to be brought in or withdrawn by the continuing partners

(B) Calculation of total capital of new firm

(D) Calculation of new capitals of the existing partners

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Asha, Deepa and Lata are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Deepa retires. After making all adjustments relating to revaluation, goodwill, Payment to Deepa and accumulated profit etc., the capital accounts of Asha and Lata showed a credit balance of Rs. 1,60,000 and Rs. 80,000 respectively. It was decided to adjust the capitals of Asha and Lata in their new profit sharing ratio. You are required to calculate the new capitals of the partners i.e Asha and Lata.

2025: 31 May Shift 1

At the time of retirement of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:

2025: 24 May Shift 1

In case there is no information regarding the acquisition of a share in profit of the retiring/deceased partner by the remaining partners, the assumption is that they will acquire his/her share in the:

2025: 15 May Shift 2

L, N and T are partners sharing profits in the ratio of 5:3:2. If N retires, the gaining ratio of L & T would be.......

2026: 11 May Shift 2

On the death of a partner, his share of loss in the firm from the last balance sheet till the date of his death is transferred to:

The ratio in which the continuing partners have acquired the share from the retiring/deceased partner is called:

Solution

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