Directions: Choose the correct option for the given question.
A and B are partners, sharing profits and losses in the ratio of 2:1. They decided to change their profit sharing ratio to 3:1. What is the loss of B?
D
Correct answer
Explanation
When profit sharing changes from 2:1 to 3:1, calculate each partner's loss/gain. Originally B had 1/3 share. New share for B is 1/4. Loss to B = 1/3 - 1/4 = 4/12 - 3/12 = 1/12. The difference represents what B surrenders to A, who gains from the change. Always compute using fractions and find the difference.