Question : What journal entry will be made to write off the goodwill that was already present in the balance sheet at the time of partner retired?
Option 1: Retiring Partner’s Capital A/c Dr.
To Goodwill A/c
Option 2: All Partner’s Capital A/cs (including retiring) Dr. (in old ratio)
To Goodwill A/c
Option 3: Remaining Partner’s Capital A/cs Dr. (in gaining ratio)
To Goodwill A/c
Option 4: Remaining Partner’s Capital A/cs Dr. (in new ratio)
To Goodwill A/c
Correct Answer: All Partner’s Capital A/cs (including retiring) Dr. (in old ratio)
To Goodwill A/c
Solution : Correct answer is Option 2
All Partner’s Capital A/cs (including retiring) Dr. (in old ratio)
To Goodwill A/c
Hence the correct answer is option 2 .
Related Questions
Question : When a new partner brings his share of goodwill in cash, the amount is debited to -
Question : A and B are partners in a firm. Their balance sheet as at 31 st March, 2018 was as follows:
| Liabilities | Rs. | Assets | Rs. |
| Provision for |
