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Question
State True or False with reason.
A new partner always bring his share of goodwill in cash.
Options
True
False
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Solution
This statement is False.
Reason:
When a new person is admitted to the partnership firm, the old partners surrender a certain share in profit and give it to a new partner. In exchange for that new partner is required to bring goodwill in cash or in kind. If he is unable to bring cash for goodwill, then Goodwill is raised and adjusted to the new partner’s capital A/c.
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RELATED QUESTIONS
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Select the most appropriate answer from the alternative given below and rewrite the sentence.
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Write a word/phrase/term which can substitute the following statement.
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____________ profit is excess of actual profits over normal profits.
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