Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

At the time of admission of partner if goodwill exist in the books of account it will be written off among:

Options:

Old partners in sacrificing ratio

All the partners in new ratio

New partners in gaining ratio

Old partners in old profit sharing ratio

Correct Answer:

Old partners in old profit sharing ratio

Explanation:

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.