Question

When goodwill is raised at its full value and it is written off ________ account is to be credited. (Fill in the blank by choosing correct option)
(a) cash
(b) goodwill
c) all partners capital account
(d) loan

Answer 1

I think the answer is a) cash

Answer 2

Answer:

Partner's Capital Account is to credited when Goodwill is written off after raised at its full value.

Explanation:

             Goodwill Journal Entries

• Good will raised or written-off  must be recorded in general entries by crediting cash and vice versa , if there is a consideration of money to be paid  for it .
• In the reconstitution of partnership firm the entries would not be accounted in Cash A/c as consideration is not paid for it, so the entries would be recorded in partner's Capital account.The Journal Entries for it would be:

Goodwill A/c (at its full value)          Dr.

                Partner's capital A/c (at old P.S.R)       Cr.

Hope you find it helpful  :)