Assertion (A): At the time of change in Profit sharing Ratio. Goodwill of the firm is not valued because no partner is compensated.
Assertion (A): At the time of change in Profit sharing Ratio. Goodwill of the firm is not valued because no partner is compensated.
Reason (R): Goodwill of the firm is valued at the time of change in profit sharing Ratio because the sacrificing partners are compensated by the Gaining Partners.
in the context of the above two statements, which of the following is correct?
a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
c) Both Assertion (A) and Reason (R) are not correct
d) Assertion (A) is not correct but the Reason (R) is correct.
Anurag Pathak Changed status to publish May 5, 2023
Ans – d)
Explanation:-
At the time of change in the profit sharing ratio, the goodwill of the firm is valued. The sacrificing partners are compensated by the gaining partners. thus assertion (A) is incorrect and Reason (R) is correct.
Anurag Pathak Changed status to publish May 5, 2023
