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Which account will be debited when there is no Goodwill Account in the books and goodwill is raised?
18. Which account will be debited when there is no Goodwill Account in the books and goodwill is raised?
- A.Partner's Capital
- Goodwill
- Cash
- Reserve
Answer: B) Goodwill
Explanation:
The goodwill account is charged with the proportionate sum and attributed distinctly to the resigned/expired accomplice's capital record. From there on, in the acquiring proportion, the leftover accomplice's capital records are charged and the generosity account is credited to discount it.