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WAEC Financial Accounting 2007 Question 45

Question 45

Partnership Admission, Retirement and Dissolution

The double entry in the books to write off goodwill is

  1. A.debit Goodwill Account, credit Capital Account
  2. B.debit Goodwill Account, credit Revaluation Account.
  3. C.debit Profit and Loss Appropriation Account credit Goodwill Account.
  4. D.debit Trading Account, credit Goodwill Account
Show the answer and explanation

Answer: C (debit Profit and Loss Appropriation Account credit Goodwill Account.)

Explanation

Writing off reduces goodwill (credit); the key debits the appropriation account.