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Goodwill brought by the new partner is immediately withdrawn by old partners. What is the effect on Cash Account?

Answer and explanation

Correct answer: Final cash balance will not increase

Cash first comes in and is then withdrawn by old partners so final cash does not increase due to goodwill. Check the effect of both entries.

Related tags

Cash GoodwillWithdrawalEntriesGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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