Accountancy Part AAdmission of a Partner

Sometimes the value of Goodwill is not given at the time of admission…

Sometimes the value of Goodwill is not given at the time of admission/retirement of a partner. In such a situation, it has to be inferred from capital and profit sharing ratio. such Goodwill is called

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Hidden Goodwill

NCERT (2026-27 edition):
Hidden Goodwill – “Sometimes the value of goodwill is not given at the time of admission of a new partner. In such a situation it has to be inferred from the arrangement of the capital and profit sharing ratio.”