When goodwill is brought in cash by new partner method is known as ........

General Accounting Principles Partnership

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When goodwill is brought in cash by new partner, method is known as:

Premium partner

Revaluation method

Memorandum revaluation method

None of the above

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Explanation:

Premium Method

Under this method, when the incoming partner brings his share of Goodwill in cash, the existing partner share it in the sacrificing ratio. However, when the amount of goodwill is paid privately by the new partner to old partner privately in cash, no entry is passed in the books of the firm.