Question

share of goodwill brought by new partner in cash is shared by old partners in
(a) profit sharing ratio
(b) Capital ratio
(c) sacrificing ratio
(d) none of these​

Answer 1

Answer:

Explanation: Goodwill brought in by a new partner is shared by the old partners in their sacrificing ratio. At the time of admission, the new partner acquires the right to share future profits; so, in exchange, he/she should compensate the sacrificing partners. Such compensation is known as premium for goodwill.

Answer 2

Explanation: Goodwill brought in by a new partner is shared by the old partners in their sacrificing ratio. At the time of admission, the new partner acquires the right to share future profits; so, in exchange, he/she should compensate the sacrificing partners. Such compensation is known as premium for goodwill.