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If the incoming partner's personal reputation increases the firm's goodwill what is still the main accounting basis for admission adjustment?

Answer and explanation

Correct answer: On old partners' sacrifice of profit

In admission accounting goodwill adjustment is linked with change in profit share. Focus on profit sacrifice rather than personal reputation.

Related tags

Conceptual ReasoningGoodwill BasisAdmissionGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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