Question

Any balance in the goodwill account at the time of dissolution must be transferred to
partner's capital accounts.
(True/False)
​

Answer 1

Answer:

True

Explanation:

Treatment of goodwill is very easy in case of dissolution of a firm. In case, if goodwill is already appearing in the balance sheet, it is treated like any other asset, and is transferred to the realisation account at the value given in balance sheet. Following entry is passed for it.