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The deed says goodwill on death of a partner will be twice the average profit of three years. What is the purpose of this clause?

Answer and explanation

Correct answer: To find fair value of deceased partners share

Such a clause gives a basis for amount due on death. It reduces disputes between heirs and continuing partners.

Related tags

GoodwillDeath Of PartnerValuationPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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