passwella.
Menu

JAMB Principles of Accounts 2012 Question 39

Question 39

Partnership Admission, Retirement and Dissolution

In what way can a goodwill be written off in a partnership business?

  1. A.Using the partners' profit and loss sharing ratio
  2. B.By neglecting the ratio of partners capital contributions
  3. C.By sharing it unequally among the partners where no agreement exists
  4. D.By sharing it among the active partners' only.
Show the answer and explanation

Answer: A (Using the partners' profit and loss sharing ratio)

Explanation

Goodwill is written off against the partners' capitals in their profit-sharing ratio.