When a new partner brings his share of goodwill in cash, the amount is credited to: MCQ with Answer and Explanation

When a new partner brings his share of goodwill in cash, the amount is credited to:
A. New Partner's Capital Account
B. Cash Account
C. Premium for Goodwill Account
D. Revaluation Account
Answer: Option C
Solution (By JKSSB Mock Tests)
The cash brought in for goodwill is initially credited to a temporary 'Premium for Goodwill A/c', which is then distributed to sacrificing partners.

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1
Under Ind AS 115, if an entity receives a non-refundable upfront fee and has no further performance obligations, when should the revenue be recognized?
A. Over the expected life of the customer relationship
B. At the point in time when the entity transfers control of the good/service
C. Recognized immediately upon receipt of cash
D. Amortized over the contractual period of the agreement

Correct Answer: Option B


Explanation:
Ind AS 115 states that if an upfront fee relates to a good or service and there are no further performance obligations, revenue is recognized when control of that good or service is transferred.

Question #2
A firm's assets total ₹10,00,000 and its owner's equity is ₹4,00,000. The firm borrows ₹2,00,000 from a bank. After the borrowing, what is the total liabilities to outsiders?
A. ₹8,00,000
B. ₹10,00,000
C. ₹4,00,000
D. ₹6,00,000

Correct Answer: Option A


Explanation:
Initially, liabilities = Assets - Equity = 10,00,000 - 4,00,000 = 6,00,000. After borrowing 2,00,000, liabilities become 8,00,000.

Question #3
Under GST, which constitutional amendment act was passed to implement it?
A. 101st Amendment Act
B. 103rd Amendment Act
C. 102nd Amendment Act
D. 100th Amendment Act

Correct Answer: Option A


Explanation:
The Constitution (101st Amendment) Act, 2016 paved the way for the introduction of GST in India.