Match List-I with List-IIList-I(A) Incoming partner brings goodwill i…

Match List-I with List-II

List-I

(A) Incoming partner brings goodwill in cash

(B) Goodwill already exist in the books

(D) Goodwill paid privately to sacrificing partners

List-II

(I) No entry to be passed

(II) Sacrificing partners are credited with their share and new partner is debited

(III) Amount of Premium is shared by the existing partners in the sacrificing ratio

(IV) Write-off the goodwill in old ratio

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Goodwill on admission belongs to the old partners, so in every case the new partner compensates the sacrificing partners; only the route changes.

(A) Incoming partner brings goodwill in cash — this matches (III) Amount of Premium is shared by the existing partners in the sacrificing ratio. The premium is credited to the old partners in the ratio in which they gave up their shares.

(B) Goodwill already exist in the books — this matches (IV) Write-off the goodwill in old ratio. Goodwill recorded earlier was built up by the old partners, so it is written off among them in their old ratio.

(C) Incoming partner does not bring goodwill in cash — this matches (II) Sacrificing partners are credited with their share and new partner is debited. His capital (or current) account is debited with his share, and the sacrificing partners are credited.

(D) Goodwill paid privately to sacrificing partners — this matches (I) No entry to be passed. The money never passes through the firm, so the firm’s books record nothing.

NCERT (2026-27 edition):
When the new Partner brings goodwill in cash – “The amount of premium brought in by the new partner is shared by the existing partners in their ratio of sacrifice. If this amount is paid to the old partners directly (privately) by the new partner, no entry is passed in the books of the firm.”

NCERT (2026-27 edition):
When the new partner does not bring goodwill in cash, partly or fully – “Goodwill not brought by the new partner will be debited to current account of new partner while sacrificing partners' capital accounts will be credited for their respective shares.”

NCERT (2026-27 edition):
Goodwill – “… When goodwill exists in the books : Goodwill appearing in the books will be written-off by debiting old partners ‘capital accounts in their old profit sharing ratio. Thereafter new value of goodwill will be given effect by crediting sacrificing partners' capital accounts and debiting new partners’ current account.”