Question

13. How will you record in the books of firm, if goodwill appearing in the old Balance
Sheet at the time of admission of a new partner?
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Answer 1

Answer:

The accounting treatment of such goodwill is as follows: Old partner's Capital A/c Dr. The entry to write off existing goodwill is always passed whether the goodwill is brought in cash or not. After passing the above entry, goodwill will not appear in the new balance sheet.