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A new partner brings goodwill in cash and old partners withdraw the full amount. What is the final effect on old partners' capital accounts?

Answer and explanation

Correct answer: They are first credited and then debited

Old partners are credited when goodwill is received and debited when withdrawn. Bank effect may also become nil finally.

Related tags

GoodwillPremium WithdrawnCapital EffectPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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