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JAMB Principles of Accounts 1999 Question 31

Question 31

Partnership Admission, Retirement and Dissolution

Goodwill can be valued in partnership when

  1. A.partners make profits
  2. B.large losses are made
  3. C.a partner retires
  4. D.a new branch is opened.
Show the answer and explanation

Answer: C (a partner retires)

Explanation

Goodwill is valued when the partnership changes, e.g. when a partner retires or is admitted.