Given below are two statements, one labeled as Assertion (A) and the other labeled as
Reason (R)
Assertion (A) : At the time of admission of a new partner, he brings premium for goodwill,
which is distributed among the sacrificing partners.
Reason (R) : By bringing premium for goodwill, a new partner compensates all old partners.
Choose the correct option :

Dear Student,

As per the given details in the question, both, assertion and reason are true and the reason is the correct explanation of the assertion.

Explanation- The premium for goodwill is the additional amount brought in by the new partner to compensate the old partners for their loss in the firm's share of super-profits. By crediting their capital accounts, the extra money is distributed among the old partners in their sacrificing ratios.

Therefore, as per the standard rules of Assertion-Reason type questions, option A is correct.


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