Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership. The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities. What method would the accountant have used for recording the admission of Quincy to the partnership?
A) the bonus method.
B) the equity method.
C) the goodwill method.
D) the proportionate method.
E) the cost method.

Question

Quizplus · Accepted Answer

The goodwill method treats the admission of a new partner as creating a new partnership entity, recognizing any goodwill in the process.

Cherryhill and Hace Had Been Partners for Several Years, and They