Maharashtra State BoardHSC Commerce 12th Board Exam
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Select the Most Appropriate Answer from the Alternatives Given Below : - Book Keeping and Accountancy

MCQ

Select the most appropriate answer from the alternatives given below :

When goodwill is raised at its full value and it is written off __________ account is to be credited.

Options

  • Cash

  • goodwill

  • all Partners capital account

  • loan

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Solution

When goodwill is raised at its full value and it is written off, goodwill account is to be credited.

Explanation: When goodwill is raised in the books of the firm at its full value and it is written off, then Goodwill Account is to be credited and all partners’ Capital Accounts are to be debited in their old profit sharing ratio.

Concept: Retirement Or Death 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 4 Reconstitution of Partnership (Retirement of Partnership)
Exercise | Q 3 | Page 127
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