A and B are partners sharing profits 3:2. They admit C for 1/4th share. A and B decide to share future profits equally. What is the sacrificing ratio of A and B? MCQ with Answer and Explanation
A and B are partners sharing profits 3:2. They admit C for 1/4th share. A and B decide to share future profits equally. What is the sacrificing ratio of A and B?
A. 3:2
B. 9:1
C. 1:1
D. 5:3
Answer: Option B
Solution (By JKSSB Mock Tests)
C gets 1/4. Remaining share = 3/4. New shares of A = 3/8, B = 3/8. Sacrifice = Old - New. A: 3/5 - 3/8 = 9/40. B: 2/5 - 3/8 = 1/40. Ratio is 9:1.
Explanation:
The historical cost principle requires that assets be recorded at their original purchase price, irrespective of changes in market value over time.
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