Maharashtra State BoardHSC Commerce 12th Board Exam
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State Whether the Following Statements is True Or False : - Book Keeping and Accountancy

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MCQ

State whether the following statements is true or false :

Retiring partner is entitled to his share of goodwill.

Options

  • True

  • False

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Solution

True

Explanation:
 The remaining/continuing partners need to compensate the outgoing (retiring/deceased) partner. This is because after the retirement/death of a partner, the fruits of the collective past performances and reputation will be shared only by the continuing partners. Hence, the remaining partners compensate the retiring or the deceased partner by entitling him/her to a share of the firm's goodwill.

Concept: Retirement Or Death of a Partner - Treatment of Goodwill
  Is there an error in this question or solution?
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 5 Reconstitution of Partnership (Death of Partner)
Exercise | Q 1 | Page 141
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