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Question : When goodwill existing in the books is written off at the time of admission of a partner it is transferred to Partners' Capital Accounts in their

Option 1: Old profit-sharing ratio

Option 2: New profit-sharing ratio

Option 3: Sacrificing ratio

Option 4: Gaining ratio


Team Careers360 10th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Old profit-sharing ratio


Solution : Answer = Old profit-sharing ratio
If a new partner brings his share of goodwill in cash, and if the Goodwill Account already appears in the books of the firm, first of all, the existing Goodwill Account will have to be written off. For this purpose old Partner's Capital Accounts are debited in their old profit-sharing ratio and the Goodwill Account is credited.
Hence, the correct option is 1.

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