Question

When a new partnership is formed and Goodwill is recognized what should follow: a. Nothing b....

When a new partnership is formed and Goodwill is recognized what should follow:

a.

Nothing
b.

Distribution of cash
c.

Increase all partners accounts
d.

Re-evaluation of assets and liabilities
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Homework Answers

Answer #1

Ans:a.   Nothing is Correct Answer

Explanation;

When a new partnership is formed and Goodwill is recognized , Then do nothing as the partnership consists of partners which are liable for their respective share of loss and liable to invest their respective share of partnership and agreements among which help them to carry the bussiness without any disputes in the later period and however goodwill is the value of the partnership which is increase when partnership performance and profits are well in version wth the public opinion on the market.

Hope this helped ! Let me know in case of any queries.

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