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When Goodwill Exist in the Business

When we reali...

Question

When we realise that the existing value of goodwill is no more valid than we debit the accounts and credit the goodwill account.

A

goodwill

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B

partner's capital

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C

partner's assets

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D

partner's reserve

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Solution

The correct option is B partner's capital
When partner's realise that existing goodwill is no more valid, then we write off the existing goodwill. So we debit the partner's capital account and credit the goodwill account.

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