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Under fixed capital method goodwill adjustment required crediting A by fifteen thousand rupees and debiting B by fifteen thousand rupees. It was wrongly done in capital accounts. What is the correct correction?

Answer and explanation

Correct answer: Debit A capital credit B capital and credit A current debit B current

In fixed capital such adjustment should be in current accounts. Remove wrong capital effect and pass the same effect through current accounts.

Related tags

Goodwill AdjustmentFixed CapitalRectificationCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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