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Question
State whether the following statements is true or false :
Retiring partner is entitled to his share of goodwill.
Options
True
False
MCQ
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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.
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