Which among the following is NOT true for the New Profit Sharing Ratio?
- AHow much of the share of profit for the new partner and how he will acquire it from the existing partners is decided mutually between the old partners and the new partner.
- BIf nothing is specified as to how the new partner acquires his share from the old partners, it may be assumed that he gets it from them in their profit sharing ratio.
- CThe new partner acquires his share from the old partners only according to their respective contribution, no any other way can be possible for profit sharing at any condition.
- DOn admission of a new partner, the profit sharing ratio among the old partners will change, keeping in view their respective contribution to the profit sharing ratio of the incoming partner.
Solution & Step-by-step Explanation
Option C states that there is "no any other way possible... at any condition," which is incorrect because the new partner can acquire shares in various mutually agreed ways (e.g., entirely from one partner, in a specific new ratio, etc.). Thus, Option C is not true.