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When the incoming partner brings his share of premium for goodwill in cash, it is adjusted by crediting to ______. -

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Question

When the incoming partner brings his share of premium for goodwill in cash, it is adjusted by crediting to ______.

Options

  • His Capital Account

  • Premium for Goodwill Account

  • Sacrificing Partners' Capital Accounts

  • None of the above

MCQ
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Solution

When the incoming partner brings his share of premium for goodwill in cash, it is adjusted by crediting to Sacrificing Partners' Capital Accounts.

Explanation:

When the new partner does not deliver the goodwill in cash, his capital account is debited, and a premium for the Goodwill account is created.

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