Match the List-I with List-II
List-I
(A) Incoming partner brings his share of goodwill and is retained by the old partners in business
(B) Incoming partner does not bring his share of goodwill
(C) Incoming partner pays his share of goodwill privately
(D) Incoming partner brings only a part of his share of goodwill
List-II
(I) No Entry
(II) Premium for Goodwill A/c Dr., Incoming Partner's Current A/c Dr. To Sacrificing Partners' Capital A/c
(III) Premium for Goodwill A/c Dr. To Sacrificing Partners' Capital A/c
(IV) Incoming Partner's Current A/c Dr. To Sacrificing Partners' Capital A/c
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A) - (III), (B) - (IV), (C) - (I), (D) - (II)
The new partner compensates the sacrificing partners for the share of profit they give up. The entry depends on whether he pays the premium through the firm, in full or in part, or outside it.
(A) Incoming partner brings his share of goodwill and is retained by the old partners in business — this matches (III) Premium for Goodwill A/c Dr. To Sacrificing Partners' Capital A/c. The cash brought in is credited to Premium for Goodwill Account and then transferred to the sacrificing partners. As they keep it in the business, no withdrawal entry follows.
(B) Incoming partner does not bring his share of goodwill — this matches (IV) Incoming Partner's Current A/c Dr. To Sacrificing Partners' Capital A/c. The sacrificing partners are still credited, and the amount he has not brought is debited to his current account.
(C) Incoming partner pays his share of goodwill privately — this matches (I) No Entry. The money passes directly from him to the old partners, outside the firm, so nothing is recorded in the firm’s books.
(D) Incoming partner brings only a part of his share of goodwill — this matches (II) Premium for Goodwill A/c Dr., Incoming Partner's Current A/c Dr. To Sacrificing Partners' Capital A/c. The part brought in is passed on through Premium for Goodwill Account, and the part not brought is debited to his current account.
NCERT (2026-27 edition):
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