On dissolution, goodwill account is transferred to:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- On the Debit of Realisation Account.
All assets including goodwill of the firm is transferred to the debit side of the Realisation A/c. The journal entry for it will be-
Realisation A/c Dr.
To Assets (Individually) A/c
(Assets are transferred)