when incoming partner brings in his share of premium of goodwill in cash its adjusted by crediting t...........

General Accounting Principles Partnership

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when incoming partner brings in his share of premium of goodwill in cash, its adjusted by crediting to?

incoming partner's capital a/c

premium for goodwill a/c

sacrificing partners capital a/c

none of the above

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Explanation:

Premium for goodwill is the extra amount brought in by the incoming partner to compensate the old partners for their loss in the share of super profits of the firm. This extra amount is distributed among the old partners in their sacrificing ratios by crediting their capital accounts.

The accounting entry is:

Premium for goodwill a/c Dr

To Old partner's Capital a/c