When goodwill account is raised and written off in new ratio what will be the final balance of goodwill account?

Correct answer: Nil

Direct answer: Option A, nil. When goodwill is raised, the Goodwill Account is debited because goodwill is recorded as an asset, and the partners’ capital accounts are credited in the old ratio. When it is written off, the partners’ capital accounts are debited in the new ratio and the Goodwill Account is credited for the full amount. Thus the Goodwill Account has equal debit and credit totals and closes with no balance. Option A is correct. Option B is wrong because no debit amount remains after the full goodwill is written off. Option C is wrong for the same reason: no credit balance remains. Option D is wrong because bank balance is a separate account and is not the final balance of goodwill. The new ratio affects the partners’ accounts, but complete write-off makes the goodwill account nil. Memory cue: an account fully written off has zero closing balance.