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Question
State 'True' or 'False'
When goodwill is paid privately, no entry in the books of account is required.
Options
True
False
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Solution
True
Explanation: Goodwill/Premium paid outside the business does not have any link with the business; so, no entry is recorded in the books of accounts.
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| Years |
Profit Rs |
|
| I | 4,00,000 | |
| II | 4,80,000 | |
| II | 7,33,000 | |
| IV | Loss | 33,000 |
| V | 2,20,000 |
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Hints:
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