Question

Amount brought by a new partner for his share in goodwill is known as _____________.

Options

• Premium

• Will

• Profit

• Discount

Answer 1

Amount brought by a new partner for his share in goodwill is known as Premium.

Explanation:

When a new partner is admitted into the partnership he brings some amount in cash as his capital and some amount for his share of a premium of goodwill. The amount he brings for the share of goodwill is known as the premium for goodwill. The premium of goodwill is distributed by sacrificing partners in sacrificing ratio.