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Why is old ratio used for writing off old goodwill and sacrificing ratio used for admission goodwill distribution?

Answer and explanation

Correct answer: Because the first is old firm's asset and the second is compensation for sacrifice

Old goodwill belongs to the old firm so it is written off in old ratio. Admission goodwill compensates future sacrifice.

Related tags

Old GoodwillNew GoodwillComparisonGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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