Question

State whether the following statement is true or false with reason.

On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio.

Options

• True

• False

Answer 1

On retirement of a partner, remaining partner will share the goodwill in their profit sharing ratio. - False

Explanation.

On the retirement of a partner, after giving retiring. partner’s share in goodwill and if goodwill is written off, then remaining partners will adjust the goodwill in their new profit sharing ratio. (If raised to full extent and written off)