When the incoming partner brings his share of goodwill in cash . It is adjusted by crediting to
1.His capital account 2. Old partner capital account
3. Goodwill account
None of these
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Answer:
ACCOUNTANCY
When the incoming partner brings in his share of premium for goodwill in cash, it is adjusted by crediting to ____________ .
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Premium for goodwill is the extra amount brought in by the incoming partner to compensate the old partners for their loss in the share of super profits of the firm. This extra amount is distributed among the old partners in their sacrificing ratios by crediting their capital accounts.
The accounting entry is:
Premium for goodwill a/c..... Dr
To Old partner's Capital a/c
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yes upper answer is right