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Why is goodwill amount given to old partners on admission of a new partner?

Answer and explanation

Correct answer: Because they sacrificed a share of future profits

Old partners give up part of future profit so they receive goodwill. Mention sacrifice of future profits as the main reason.

Related tags

ReasoningGoodwill CompensationAdmissionGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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