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When goodwill is raised in old ratio and then written off in new ratio on admission who gets the real benefit?

Answer and explanation

Correct answer: Sacrificing old partners

Credit in old ratio and debit in new ratio gives net benefit to sacrificing partners. This method shows hidden compensation.

Related tags

Raise Writeoff GoodwillNet EffectConceptGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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