Question

If the incoming partner is to bring Premium for Goodwill in cash and also a balance exists in Goodwill Account, then this Goodwill Account is written off among old partners in ______.

पर्याय

• New Profit Sharing Ratio

• Old Profit Sharing Ratio 

• Sacrificing Ratio 

• None of the above

• The gaining ratio

Answer 1

If the incoming partner is to bring Premium for Goodwill in cash and also a balance exists in Goodwill Account, then this Goodwill Account is written off among the old partners in Old Profit Sharing Ratio.

Explanation:

In the previous profit-sharing ratio, the goodwill indicated on the balance sheet is shared among the partners. The sacrificing ratio is utilized to share the goodwill that the new partner will bring in.

If the partners elect to make it proportionate to their profit-sharing ratio, a new profit-sharing ratio is employed to reconstruct the firm’s capital.