Economics · Accounting and Auditing
Given below are two statements: One is labelled as Assertion (A) and the other is labelled as Reason (R). Assertion (A): There is a change in the profit-sharing ratio of the old partners when a new partner gets his share of profit from all the partners. Reason (R): When a new partner is admitted into the partnership for a certain share of profit, the combined relative shares of the old partners will be reduced. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both (A) and (R) are correct and (R) is the correct explanation of (A)✓
- 2Both (A) and (R) are correct but (R) is NOT the correct explanation of (A)
- 3(A) is true but (R) is false
- 4(A) is false but (R) is true
Correct answer
Both (A) and (R) are correct and (R) is the correct explanation of (A)
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