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Question
Select the most appropriate answer from the alternative given below and rewrite the sentence.
When goodwill is withdrawn by old partners ________________ a/c is credited.
Options
cash/bank
capital
revaluation
Profit and Loss Adjustment
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Solution
When goodwill is withdrawn by old partners Cash/Bank A/c is credited.
Explanation: When goodwill is withdrawn by the old partners Cash/Bank A/c is credited. This is because of the rule "Credit what goes out". The amount brought in by the new partner may be withdrawn by the sacrificing partners fully or partly.
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| Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
Sundry Creditors General Reserve Capital Reserve Anant 30,000 Sampat 15,000 Gunvant 15,000 |
9,000 9,600
60,000 |
Bank Bills Receivables Stock Tools Furniture
|
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|
| 78,600 | 78,600 |
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| Year | Profit |
| 2011 - 2012 | 18.000 |
| 2012 - 2013 | 21,000 |
| 2013 - 2014 | 24,000 |
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| ? | = | `"Total Profit"/"Number of Years"` |
