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If goodwill is brought and old partners withdraw the full amount what is the final cash effect?

Answer and explanation

Correct answer: Net effect on cash will be zero

Cash first comes in and then the same amount goes out so the net effect is zero. Both entries should be shown separately.

Related tags

Withdrawn GoodwillCash EffectReasoningGoodwill AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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