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Classifying Items of Financial Statements

Existing good...

Question

Existing goodwill is always written off among old partners in their ________ ratio.

[0.88 marks]

A

old

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B

new

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C

sacrificing

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D

gaining

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Solution

The correct option is A old
Goodwill already exists in books of accounts belonging to old partners and is distributed amongst the old partners in the old ratio before any reconstitution takes place.

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Q. If the incoming partner is to bring in premium for goodwill in cash and also balance exist, in the goodwill Account, then this Goodwill Account is written off among the old partners in _________ .

Q. When the goodwill is raised at its full value and written off at retirement of a partner, the remaining partners share goodwill in _________.

Q. A admitted as a new partner for 1/ 4 share of future profits, fails to bring in cash of Rs. 5,000 towards goodwill but the existing (old) partners B and C sharing profits in the ratio of 3 : 2 raise goodwill account at its full value. Therefore, partners will be credited for goodwill as:

Q. Goodwill brought in by incoming partner in cash for joining in a partnership firm is taken away by the old partners in their new profit sharing ratio.

Goodwill already appearing in balance sheet is distributed among old partners in ______ ratio.

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