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Which of the following factors helps in increasing the goodwill of a partnership firm?

Answer and explanation

Correct answer: Customer trust

Customer trust improves the firm’s reputation, customer loyalty and expected future profits. Therefore, it is an important factor that increases goodwill. In contrast, poor service, repeated losses and poor-quality products damage the firm’s reputation. Exam tip: Factors such as good reputation, high quality, customer trust and the ability to earn higher profits generally increase goodwill.

Related tags

GoodwillPartnership AccountsCustomer TrustBusiness ReputationAccountancyPartnership Accounts Basic ConceptsClass 12 Mcq

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