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Answer in One Sentence Only. - Book Keeping and Accountancy

One Line Answer

Answer in one sentence only.
When is goodwill account raised in the books of the firm?

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Solution

Goodwill Account is raised in the books of the firm at the time of admission of a new partner. The incoming partner brings his/her share of goodwill along to compensate the existing partners for the sacrifices made by them in the favour of the new partner.

Concept: Admission of a Partner - Treatment of Goodwill
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 3 Reconstitution of Partnership (Admission of Partner)
Exercise | Q 7 | Page 107
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