Goodwill

Description

Level 3 AAT AAT Level 3 (Sole Traders and Partnerships ) Flashcards on Goodwill , created by claire.harrison on 03/03/2015.
claire.harrison
Flashcards by claire.harrison, updated more than 1 year ago
claire.harrison
Created by claire.harrison almost 10 years ago
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Resource summary

Question Answer
Goodwill Non-Current Asset Extra Value of the Business on top of Assets (Reputation)
Goodwill (Partner Joining) DR Goodwill CR Capital Accounts (Shared on old ratio) DR Bank CR New Capital Account CR Goodwill DR Capital Accounts (Shared on new ratio) Re-Balance Capital Account
Goodwill (Partner Leaving) Transfer Current Account to Capital (Double Entry dependant on balance of Current Account) DR Goodwill CR Capital (Shared on old ratio) CR Goodwill DR Capital (Shared on new ratio) If Payment made to leaving partner CR Bank DR Capital If Payment cannot be made, amount written off as a loan: CR Loan DR Capital Balance off Capital Accounts (Leaving partners should be equal at both sides so written off )
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