When goodwill account is raised partners' capital accounts are credited in which ratio?

Correct answer: In old profit sharing ratio

Direct answer: Option A, in the old profit-sharing ratio. When goodwill is raised in the books, the firm recognises the value of its existing reputation. That reputation was created by the old partners while they were sharing profits in the old ratio. Therefore the credit for goodwill should compensate the old partners in that old ratio. Step 1: identify the old profit-sharing ratio. Step 2: record the goodwill asset when the account is raised. Step 3: credit each partner’s capital or current account in the old ratio. Option A is correct. Option B, the new profit-sharing ratio, is wrong because the new ratio relates to future sharing after the change, not the compensation for past reputation. Option C, always equally, is wrong because partners may have unequal old ratios. Option D, drawings ratio, is wrong because drawings measure withdrawals and have no role in allocating goodwill compensation. For example, if the old ratio is 3:2 and goodwill is ₹10,000, credits are ₹6,000 and ₹4,000. Memory cue: old reputation earns old-ratio credit.