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Under what circumstances premium for goodwill paid by the incoming partner would never be recorded in the books of account? - Accounts

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Question

Under what circumstances premium for goodwill paid by the incoming partner would never be recorded in the books of account? 

Very Short Answer
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Solution

When the incoming partner pays the premium for goodwill directly in cash to the old partners, outside of the business, no accounting entries are made for this transaction.

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Chapter 3: Admission of a Partner - SHORT ANSWER QUESTIONS [Page 3.149]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 3 Admission of a Partner
SHORT ANSWER QUESTIONS | Q 18. | Page 3.149
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