Accountancy Part AAdmission of a Partner

Which account will be debited, in case new partner is unable to bring…

Which account will be debited, in case new partner is unable to bring his/her share of goodwill in cash?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → New Partners’ Current A/c

When the new partner does not bring his share of goodwill in cash, the old (sacrificing) partners must still be compensated. Their capital accounts are credited, and the amount is charged to the new partner’s current account.

Option (1) All Partners’ Capital A/c — Incorrect. Only the new partner owes the goodwill; the old partners are credited, not debited.

Option (2) New Partners’ Loan A/c — Incorrect. No loan arises.

Option (4) All Partners’ Current A/c — Incorrect. The old partners are not charged for the new partner’s goodwill.

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.”