Partnership

Retirement/Death

Easy

Gaining Ratio is not calculated at the______.

Admission of a partner

Death of a partner

Change in Profit sharing ratio

Retirement of a partner

✅ Correct Option: 1

Gaining Ratio is calculated when the continuing partners acquire an additional share of profit from an outgoing partner.

The formula is: Gaining Ratio = New Share - Old Share

Analyzing each situation:

Admission of a partner: When a new partner joins, the existing partners give up (sacrifice) a portion of their profit share to the incoming partner. This requires calculation of Sacrificing Ratio, not Gaining Ratio. The old partners are losing their share, not gaining.

Death of a partner: The deceased partner's share is distributed among the remaining partners. They gain additional profit share, so Gaining Ratio is calculated.

Change in Profit sharing ratio: When existing partners mutually agree to change their profit shares, some partners may gain while others may sacrifice. Gaining Ratio is calculated for those whose share increases.

Retirement of a partner: The retiring partner's share is taken over by the continuing partners. They gain additional profit share, so Gaining Ratio is calculated.

Gaining Ratio is not calculated at the time of admission because the old partners are sacrificing their share, not gaining it.

2026: 24 May Shift 1

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

2025: 13 May Shift 1

On retirement / death of a partner, the remaining partners who have gained due to the change in profit sharing ratio should compensate the:

2026: 21 May Shift 2

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	Profit and loss Suspense A/c	I. Admission or Retirement of a partner
B.	The outgoing partner has an option to receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money (i.e. based on capital ratio)	II. Hidden Goodwill
C.	Revaluation A/c	III. Section 37 of the Indian Partnership Act 1932
D.	It has to be inferred from the arrangement of the capital and profit sharing ratio	IV. Death of a partner

Choose the correct answer from the options given below:

2025: 14 May Shift 1

In the absence of any information regarding the acquisition of share in profits of the retiring/deceased partner by the remaining partners, it is assumed that they will acquire his/her share in following:

2026: 31 May Shift 1

In the case of a death of a partner in a partnership firm, the share of profit of the deceased partner is calculated on the basis 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:

Gaining Ratio is not calculated at the______.

Solution

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