Question on: JAMB Accounting - 2023
Goodwill can be introduced when
A
the business suffers high loss
B
the business is being expanded
C
the partnership experience super profit
D
a new member is admitted
Ask EduPadi AI for a detailed answer
Correct Option: D
Goodwill can be introduced when a new member is admitted to a partnership. This is because the admission of a new partner can result in changes in the partnership's assets, earning capacity, and overall value. The excess value or premium paid by the new partner when joining the partnership can be recognized as goodwill on the partnership's balance sheet.
Add your answer
Please share this, thanks!
No responses