On 1/4/22, X and Y decided to dissolve their firm. On that date of dissolution,Goodwill appeared at ₹5,00,000 in the Balance Sheet. Goodwill will be:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Transferred to the debit side of realisation A/c
On dissolution every asset, except cash, bank and fictitious assets, is closed by transfer to the debit of the Realisation Account at its book value. Goodwill appearing in the Balance Sheet is an asset of the firm (an intangible one), so it goes to the debit side of the Realisation Account with its book value of ₹5,00,000.
NCERT (2026-27 edition): |