P1 C5 ADMISSION OF A PARNER — Elements of Account STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceElements of AccountP1 C5 ADMISSION OF A PARNER1 Mark
Question
Why a new partner is required to give his share in goodwill?
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Answer
On the admission of a new partner, old partners sacrifice some of their profit share in favour of the new partner. To compensate profit share acquired by the new partner he is required to give his share of goodwill to the firm.
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