A-LevelAccountingPartnership AccountsOct/Nov 2018Paper 1 Q141 Mark
X and Y had been in partnership sharing profit and losses in the ratio of 1:2 respectively. Z was later admitted to the partnership. It was agreed that the goodwill is valued at $120000. No goodwill account is to be retained in the books of account. Profit and losses were to be shared between X, Y and Z in the ratio of 2:1:1 respectively. What was the effect of the goodwill adjustment in X's capital account?
Adecreased by $20000
Bdecreased by $60000
Cincreased by $20000
Dincreased by $60000
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The correct answer is A. This question tests the candidate's understanding of partnership accounts within the Accountingsyllabus. The examiner's mark scheme requires...
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