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If the incoming partner brings goodwill in cash but Goodwill Account is not opened in the books what method is this?

Answer and explanation

Correct answer: Premium method

Goodwill brought in cash is called premium and is credited directly to old partners. Do not confuse it with an asset Goodwill Account.

Related tags

Premium MethodCash GoodwillConceptGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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