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Admission of New Partner

Which of the ...

Question

Which of the following method is followed when incoming partner brings his share of Goodwill in cash___________.

A

Premium Method

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B

Revaluation Method

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C

Realisaton Method

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D

None of Above

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Solution

The correct option is A Premium Method
Incoming partner who acquires his share in the profits of the firm from the existing partners brings in some additional amount to compensate them for loss of their share in super profits. It is termed as his share of goodwill (also called premium).

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Similar questions

Q. When the incoming partner bring his share of goodwill in cash, which of these methods of revaluation of goodwill is appropriate?

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

Q. When the incoming partner brings in his share of premium for goodwill in cash, it is adjusted by crediting to ____________ .

Q. The new partner brings cash for his share of goodwill and the same is shared by the old partners in their sacrificing ratio. The method is called __________.

Q. Write the word/term or phrase which can substitute each of the following statement.

Account which is debited when new partner brings cash for his share of goodwill.

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