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easyMCQCUET Accountancy 16 July Shift 22026CUET Accountancy
1 mark

Sometimes the value of Goodwill is not given directly at the time of admission/retirement of a partner. In such a situation, it has to be inferred from the total capital structure and profit-sharing ratio. Such Goodwill is called:

  1. A
    Written off Goodwill
  2. B
    Hidden Goodwill
  3. C
    Sacrificing Goodwill
  4. D
    Purchased Goodwill

Solution & Step-by-step Explanation

Hidden Goodwill (or Inferred Goodwill) is goodwill that is not explicitly stated in the problem but must be calculated on the basis of the new/total capital of the firm derived from a partner's contribution and their respective profit-sharing ratio.

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Sometimes the value of Goodwill is not given directly at the time of admission/retirement of a partner. In such a situation, it has to be inferred from the total capital structure and profit-sharing ratio. Such Goodwill is called:
A
Written off Goodwill
B
Hidden Goodwill
C
Sacrificing Goodwill
D
Purchased Goodwill

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PartnershipAdmissionHidden Goodwill

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