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Goodwill Given in the old Balance Sheet will be:
- a)Written off by the old partners
- b)Written off by the Sacrificing partners
- c)Distributed by Gainer partners
- d)Credited to old Partners Capital accounts
Correct answer is option 'A'. Can you explain this answer?
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Goodwill Given in the old Balance Sheet will be:a)Written off by the o...
Goodwill given in the old balance sheet will be written off by all the partners (including retiring partner) at the time of retirement of a partner. Goodwill will be written off in the old ratio of all the partners.
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Goodwill Given in the old Balance Sheet will be:a)Written off by the o...
AS-26, 'Intangible assets' prescribes that goodwill should be recorded in the books ony when consideration in money or money's worth is paid for it.Thus, in case of change in PSR among partners or admission or retirement/death of a partner, goodwill sshouldn't be raised in the books of the firm because no consideration in money or money's worth is paid for it. In case, goodwill is raised it should be immidiately written off.
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Goodwill Given in the old Balance Sheet will be:a)Written off by the o...
Explanation:
Written off by the old partners:
- Goodwill given in the old Balance Sheet is an intangible asset that represents the reputation and customer base of the business.
- When there is a change in the partnership, the existing goodwill needs to be accounted for.
- The old partners, who are retiring or leaving the partnership, will need to write off the goodwill from their capital accounts.
- This is because the goodwill was attributed to them in the old Balance Sheet, and they no longer have a stake in the partnership to claim it.
Therefore, the correct answer is option 'A': Written off by the old partners.
Written off by the old partners:
- Goodwill given in the old Balance Sheet is an intangible asset that represents the reputation and customer base of the business.
- When there is a change in the partnership, the existing goodwill needs to be accounted for.
- The old partners, who are retiring or leaving the partnership, will need to write off the goodwill from their capital accounts.
- This is because the goodwill was attributed to them in the old Balance Sheet, and they no longer have a stake in the partnership to claim it.
Therefore, the correct answer is option 'A': Written off by the old partners.
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Goodwill Given in the old Balance Sheet will be:a)Written off by the old partnersb)Written off by the Sacrificing partnersc)Distributed by Gainer partnersd)Credited to old Partners Capital accountsCorrect answer is option 'A'. Can you explain this answer?
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