Question

If the goodwill is raised to the extent of retiring partners share ________ account is to be debited (Fill in the blank by choosing correct option)
(a) cash
(b) goodwill
c) all partner's capital
(d) retiring partners capital

Answer 1

WILL BE DEBITED TO

ALL PARTNER CAPITAL AC

Answer 2

Answer:

c) all partner's capital

Explanation:

If the goodwill is raised to the extent of retiring partners share to all partner's capital account is to be debited

The firm's goodwill is appreciated in accordance with the partnership act. It will be appreciated by mutual approval or arbitration if there is no such clause in the act. The share of goodwill of the retirement partner is then determined based on the share of revenues the retirement partner receives. The capital account of the retired partner is credited with its share of goodwill and the amount is debited in the ratio of their gain to the capital accounts of the remaining partners.