Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Admission of a Partner

Question:

If the incoming partner brings the amount of goodwill in cash and also a balance exists in Goodwill A/c, then the Goodwill A/c in the books is written off among the old partners in which ratio?

Options:

In new profit-sharing ratio

In old profit-sharing ratio

In sacrificing ratio

In gaining ratio

Correct Answer:

In old profit-sharing ratio

Explanation:

The correct answer is option 2- In old profit-sharing ratio.

When a new partner is admitted and brings in cash for goodwill, the existing goodwill in the books needs to be adjusted. The balance in the Goodwill Account is written off among the old partners based in their old profit-sharing ratio.