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If premium for goodwill is distributed among old partners in sacrificing ratio, what does it show?

Answer and explanation

Correct answer: Old partners have sacrificed profit share

Sacrificing ratio shows how much profit share old partners gave up. Therefore premium is given in that ratio.

Related tags

Sacrificing RatioPremium DistributionConceptGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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