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The deed states that goodwill on admission of a new partner will be credited to sacrificing partners. This clause is mainly based on which principle?

Answer and explanation

Correct answer: Sacrificing ratio principle

The new partner gets a profit share from old partners. Therefore goodwill compensation is given in sacrificing ratio.

Related tags

GoodwillSacrificing RatioDeed ClausePartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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