Commerce Exam > Commerce Questions > What should be the amount of compensation if ...
Start Learning for Free
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:
- a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificed
- b)Amount of compensation = Value’s of firm goodwill x share of profit sacrificed
- c)Amount of compensation = Profit of the year x share of profit gained
- d)Amount of compensation = Value’s of firm goodwill x share of profit gained
Correct answer is 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
What should be the amount of compensation if the partners of the firm ...
The amount of compensation will be equal to the proportionate amount of goodwill. The valuation of goodwill of a firm, its treatment and adjustment is required at the time of change in existing profit sharing ratio among the partners.
Most Upvoted Answer
What should be the amount of compensation if the partners of the firm ...
Only the partner who sacrifice his share of profit will able to take the amount of goodwill in the sacrificing share from gaining partner.
Free Test
FREE
| Start Free Test |
Community Answer
What should be the amount of compensation if the partners of the firm ...
There is no definitive answer to this question as the amount of compensation would depend on various factors such as the current profit share ratio, the financial position of the firm, the growth prospects, and the negotiation between the partners. However, some possible considerations for determining the amount of compensation could include:
1. Fairness: The partners may agree to compensate the partner who is giving up a higher share with a fair amount that reflects their contribution and the potential impact on their income.
2. Market value: The partners may consider the market value of the partner's share in determining the compensation amount. This could be based on industry standards or valuations of similar firms.
3. Future prospects: If changing the profit share ratio is expected to lead to increased profitability in the future, the partners may consider compensating the partner who is giving up a higher share less or even not at all.
4. Contribution and effort: The partners may consider the individual contributions and efforts of each partner in determining the compensation amount. This could include factors such as workload, responsibilities, and specific skills or expertise.
Ultimately, the partners would need to negotiate and come to an agreement on the amount of compensation that is fair and reasonable for all parties involved.
1. Fairness: The partners may agree to compensate the partner who is giving up a higher share with a fair amount that reflects their contribution and the potential impact on their income.
2. Market value: The partners may consider the market value of the partner's share in determining the compensation amount. This could be based on industry standards or valuations of similar firms.
3. Future prospects: If changing the profit share ratio is expected to lead to increased profitability in the future, the partners may consider compensating the partner who is giving up a higher share less or even not at all.
4. Contribution and effort: The partners may consider the individual contributions and efforts of each partner in determining the compensation amount. This could include factors such as workload, responsibilities, and specific skills or expertise.
Ultimately, the partners would need to negotiate and come to an agreement on the amount of compensation that is fair and reasonable for all parties involved.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?
Question Description
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?.
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?.
Solutions for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?, a detailed solution for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? has been provided alongside types of What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup