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Standard XII
Accountancy
Valuation and Adjustment of Goodwill on Retirement
Question

When required amount of premium for goodwill is not brought in by new partner, goodwill account is created in the books of the firm by debiting goodwill account and crediting partners capital account in ______.

A
New profit sharing ratio.
B
Capital ratio.
C
Old profit sharing ratio.
D
Sacrificing ratio.
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Solution
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Correct option is B. Old profit sharing ratio.

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