Question : Which of the statements is true?
Option 1: The deceased partner is entitled to his share of goodwill because goodwill was earned by The firm when he was a partner.
Option 2: In the case of Retirement of a Partner, Gaining Partners Compensate the deceased partner by paying goodwill in their gaining ratio.
Option 3: Deceased Partner s Share of Goodwill = Value of Firm's Goodwill × Profit Share of Deceased Partner
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above
All of the statements are true regarding the treatment of goodwill in partnerships. The deceased partner retains rights to their share of goodwill, as it was earned during their tenure. Upon retirement, gaining partners compensate the retiring partner for their share of goodwill, calculated based on their profit share.
Hence, the correct option is 4.
