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State True or False with reasons:The new ratio minus the old ratio is equal to the sacrifice ratio. |
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Answer» This statement is False. When a new partner is admitted, old partners have to sacrifice their profit share in favour of the new partner and their old ratio gets reduced and whatever ratio is left becomes a new ratio. Hence, as per equation: New Ratio = Old Ratio – Sacrifice Ratio. By interchanging the terms, Sacrifice Ratio = Old Ratio – New Ratio. |
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