Question

Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts only when money or money’s worth has been paid for it. At the time of admission, Vivaan, a new partner was unable to bring in his share of goodwill in cash, so according to Accounting Standard-26 his:

(a) Current A/c will be credited

(b) Current A/c will be debited

(c) Capital A/c will be debited

(d) Capital A/c will be credited

Answer 1

Correct option is (b) Current A/c will be debited

Explanation: Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts only when money or money’s worth has been paid for it. At the time of admission, Vivaan, a new partner was unable to bring in his share of goodwill in cash, so according to Accounting Standard-26 his Current A/c will be debited.