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In line with what is prescribed by Accounting Standards, existing goodwill appearing in the balance sheet is written off at the time of:

  1. A
    Firm's dissolution
  2. B
    Revaluation of assets and liabilities
  3. C
    Firm's reconstitution
  4. D
    Preparation of Realisation A/c

Solution & Step-by-step Explanation

According to AS-26 (Intangible Assets), internally generated goodwill should not be recognized. Hence, whenever a firm is reconstituted (due to admission, retirement, or death of a partner), any existing goodwill shown in the books must be written off immediately by debiting the old partners' capital accounts in their old profit-sharing ratio.

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In line with what is prescribed by Accounting Standards, existing goodwill appearing in the balance sheet is written off at the time of:
A
Firm's dissolution
B
Revaluation of assets and liabilities
C
Firm's reconstitution
D
Preparation of Realisation A/c

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