State the Journal entry when sacrificing partner Radha withdraws her Share of goodwill in cash?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Radha's Capital A/c Dr. To Cash A/c
The premium for goodwill brought by the new partner is first credited to the sacrificing partners’ capital accounts. If a sacrificing partner then takes her share out in cash, her capital account is reduced and cash goes out.
Radha’s Capital A/c Dr.
To Cash A/c
The entry crediting Radha (Premium for Goodwill A/c Dr. To Radha’s Capital A/c) is passed when the premium is brought in; the withdrawal is a second, separate entry.
NCERT (2026-27 edition):
|
