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If ₹30,000 is received in cash from the incoming partner as premium for goodwill and the old partners immediately withdraw it, what will be the net effect on the bank balance?

Answer and explanation

Correct answer: शून्य प्रभाव (Nil effect)

Receiving ₹30,000 from the incoming partner increases the bank balance by ₹30,000. When the old partners immediately withdraw the same amount, the bank balance decreases by ₹30,000. Therefore, the net effect of the two transactions is nil. Exam tip: Record the receipt and withdrawal separately, then calculate their net effect.

Related tags

Premium For GoodwillBank BalancePartner AdmissionWithdrawalAccounting EntriesGoodwill AccountingReconstitution Admission Of A PartnerAccountancy

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