A: Goodwill is valued at the time of admission, retirement, or death of a partner. R: Goodwill represents the reputation of the firm built by the efforts of the partners. Choose the correct option.
A.A is true but R is false
B.A is false but R is true
C.Both A and R are true but R is NOT the correct explanation of A
D.Both A and R are true and R is the correct explanation of A
Explanation:
Goodwill is indeed valued during changes in the profit-sharing ratio or constitution of the firm. While R is a true statement about goodwill, it doesn't explain *why* it is valued at those specific times (which is to compensate the outgoing/sacrificing partners).
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