Question

What is mean by raising of goodwill in the books of firm?

Answer 1

Means increasing their reputation in market

Answer 2

When Goodwill is Brought in Cash and not Recorded in the Books:

The goodwill amount brought in by the newcomer is not shown in the books of account. Many occasions are there where the amount of goodwill is not brought into the firm but the old partners are paid by the new partners as if it is an outside transaction. This system is not scientific as it avoids income tax and leads to black money. This is not a healthy practice in the business.