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Goodwill

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Question

Objective Type Questions :
Answer in one sentence only.

When is goodwill account raised in the books of the firm?

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Solution

Goodwill Account is raised in the books of the firm at the time of admission of a new partner. The incoming partner brings his/her share of goodwill along to compensate the existing partners for the sacrifices made by them in the favour of the new partner.

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