A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2017 · Q131 Mark
Why is goodwill adjusted in the books of account when a new partner is admitted?
Amore accurate value of non-current assets is shown in the statement of financial position.
BOriginal partners can be credited for their efforts in building up the partnership business.
CPartners can take higher drawings as a result of their share of the goodwill.
DThe new partner knows how much they have to introduce as capital.
✓ Correct answer
B: Original partners can be credited for their efforts in building up the partnership business.
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