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The new partner is unable to bring goodwill in cash. How is goodwill compensation given to old partners?

Answer and explanation

Correct answer: By debiting new partner's current or capital account

When goodwill is not brought in cash the new partner's account is debited for his share. Old partners are credited in sacrificing ratio.

Related tags

Hidden GoodwillNew Partner AccountEntryGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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