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If the new partner brings goodwill in cash and the amount is retained in business which account is credited?

Answer and explanation

Correct answer: Old partners' capital accounts

Goodwill brought in cash is credited to old partners' capital accounts in sacrificing ratio. In exams record cash first and then distribution.

Related tags

Cash GoodwillSacrificing RatioJournalGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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