Question

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.

Answer 1

Cash/Bank A/c

Explanation: Cash/Bank A/c is debited when the new partner brings cash for his/her share of goodwill, following the rule "Debit what comes in". This amount of goodwill (premium) is transferred to the capital accounts of sacrificing partners in the sacrificing ratio of the old partners.