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If a new partner brings more goodwill premium than his share, what is the effect of the excess?

Answer and explanation

Correct answer: Extra benefit from new partner to old partners

Excess premium gives extra compensation to old partners. It is adjusted in capital accounts as per the situation.

Related tags

Excess PremiumGoodwillAdjustmentGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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