Question : On dissolution, goodwill account is transferred to :
Option 1: the Capital Accounts of Partners
Option 2: On the credit of Cash Account
Option 3: On the Debit of Realisation Account
Option 4: On the Credit of Realisation Account
Answer (1)
26th Jan, 2024
Correct Answer: On the Debit of Realisation Account
Solution : All of the Firm's assets that can be sold for cash are moved to the Realization Account. Goodwill is regarded like any other asset and moved to the debit of Realization Account at the value stated in the Balance Sheet if it already appears there.
Hence the Correct answer is option 3.
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