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Goodwill brought in by a new partner at admission is typically credited to
AThe old partners' capital accounts in the sacrificing ratio
BThe Revaluation Account
CThe Profit & Loss Appropriation Account
DThe new partner's capital account
Answer & Solution
Correct answer: A. The old partners' capital accounts in the sacrificing ratio
Goodwill (or premium) compensates the old partners for the share of future super-profits being given up; it is credited to them in their sacrificing ratio.
Related questions
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