Identify the factor that does not affect the value of goodwill of a partnership firm.
This question was previously asked in
Shift 31/05/2023 3:30 PM - 6:30 PM
A
Change in profit sharing ratio of partners
B
Efficiency of management
C
Market situation
D
Location
Correct Answer
Change in profit sharing ratio of partners
Detailed Explanation
Profit sharing ratio is a term used in partnership accounting to describe the division of profits among the partners in a partnership firm. It specifies the proportion in which the net profits (or losses) of the partnership will be shared among the partners. The profit sharing ratio is usually determined in the partnership agreement or deed.
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