Question

If the goodwill account raised up, goodwill account is debited. (State True or False)

Answer 1

false I hope so the answer is

Answer 2

Answer:

                    This Statement is true.

Explanation:

Goodwill raised up , whether it is the Partnership firm or a normal business transaction, will always be debited. Journal Entries would be:

• If consideration of money is paid for it :

              Asset (at fair value)      Dr.

              Goodwill A/c                 Dr.

                                      Cash/Bank        Cr.

• If  there is no consideration of money paid for it and the goodwill is raised as a result of reconstitution of the Partnership , the Journal Entry would be:

             Good will  A/c           Dr.

                          Partner's Capital A/c      Cr.            

In both the scenarios, Good will raised is always debited.

Hope u find it helpful :)