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Admission of New Partner

State 'True' ...

Question

State 'True' or 'False'

The new partner must pay his share of goodwill in cash only.

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Solution

False

Explanation: The new partner can pay his share of goodwill either in cash or kind. Besides this, the amount can also be paid privately (i.e. outside the business).

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Q. New incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners ____________.

Q. State whether the following statements are true or false :

Retiring partner is entitled to his share of goodwill.

Q. State whether the following statements are true or false :

On the death of a partner, his share in the goodwill is divided equally among continuing partners.

Q. ___________ method is followed when the new partner does not bring in his share of goodwill in cash.

Q. State 'True' or 'False'

The goodwill brought in by the new partner is shared by all partners.

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