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Why is gaining ratio important instead of new ratio in goodwill adjustment?

Answer and explanation

Correct answer: Because remaining partners bear the burden based on increased share only

Goodwill burden is for the extra share received by remaining partners. Therefore gaining ratio is the correct basis.

Related tags

Goodwill AdjustmentGaining RatioConceptNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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