Why should a new partner contribute towards goodwill on his admission?

Why should a new partner contribute towards goodwill on his admission?

A It is a norm

B to ensure new partner also have a stake in the business

C the firm into which he is entering already has some goodwill in the market

D to purchase the business

Answer is C

When a new partner pays Goodwill it is usually because the partnership he/she is entering into already has goodwill in the market as well as to pay for the portion sacrificed by existing partners in form to their profit to on-board the new partner.

Leave a Reply

MEET OVER 2000 NOUN STUDENTS HERE. 

Join us for latest NOUN UPDATES and Free TMA answers posted by students on our Telegram. 

OUR ONLINE TUTORIAL CLASS IS NOW ON!!! JOIN US NOW. 
JOIN NOW!
close-link
%d bloggers like this: