When a new partner brings his share of goodwill in cash, the amount is credited to:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Premium for goodwill account
The premium is received in cash, so Bank A/c is debited and Premium for Goodwill A/c is credited. The premium is then passed on to the sacrificing partners’ capital accounts in their sacrificing ratio.
NCERT (2026-27 edition):
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