passwella.
Menu

WAEC Financial Accounting 2004 Question 25

Question 25

Partnership Admission, Retirement and Dissolution

Goodwill is taken into account in partnership when

  1. A.the business has good customer relations
  2. B.the business is making huge profit
  3. C.a new partner is admitted
  4. D.a partner becomes dormant
Show the answer and explanation

Answer: C (a new partner is admitted)

Explanation

Goodwill is valued when the partnership changes, e.g. on admission of a partner.