In what way can goodwill be written off in a partnership ...
In what way can goodwill be written off in a partnership business?
Using the partner's profit and loss sharing ratio
By neglecting the ratio of partners capital contributions
By sharing it unequally among the partners where no agreement exists
By sharing it among the active partners only
Correct answer is A
To put it in other words, if we want to carry forward existing Goodwill in the books, then the value of existing Goodwill should be deducted from the new value of Goodwill. This excess value of Goodwill must be credited to the existing partners capital accounts in their profit sharing ratio.
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