In case of change in profit sharing ratio the gaining partner must compensate the sacrificing p...........

In case of change in profit-sharing ratio, the gaining partner must compensate the sacrificing partners by paying the proportional amount of

Capital

Cash

Goodwill

None of the above

- When there is a change in the profit-sharing ratio among partners, adjustments are necessary.

- The gaining partner compensates the sacrificing partners.

- This compensation relates to the value of goodwill.

- Goodwill represents the firm's reputation and earning potential.

- The gaining partner pays the sacrificing partners a proportional amount related to the value of goodwill.

Answer: Option 3 - Goodwill

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