When a new partner brings in capital for his share of goodwill in cash, the journal entry is: MCQ with Answer and Explanation

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When a new partner brings in capital for his share of goodwill in cash, the journal entry is:

A. Cash A/c Dr. To Goodwill A/c

B. Cash A/c Dr. To Partner's Capital A/c

C. Premium for Goodwill A/c Dr. To Cash A/c

D. Cash A/c Dr. To Premium for Goodwill A/c

Answer: Option D

Solution (By JKSSB Mock Tests)

If the incoming partner pays for goodwill privately or through firm, if paid to firm, entry is Cash Dr. To Premium for Goodwill A/c.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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A 'Funds Flow Statement' shows:

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Correct Answer: Option B

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Funds flow statement explains the change in financial position (working capital) between two balance sheets.

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Correct Answer: Option D

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For internal control, vouchers must be signed and authorized by a designated manager or official before posting.

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Correct Answer: Option A

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