On dissolution of partnership, goodwill account is transferred to:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- The debit side of Realisation Account.
On dissolution of partnership, goodwill account is transferred to the debit side of Realisation Account.
Goodwill does not have any special treatment in dissolution. It should be treated like any other asset. If it already appears in books, it will be transferred, like all other assets, to the debit side of Realisation Account.