capital
loan
drawings
premium
Answer is Right!
Answer is Wrong!
The correct answer is A. capital.
Goodwill brought in by a new partner in cash is called capital. Capital is the total amount of money that a partner invests in a business. It can be contributed in cash, property, or services. When a new partner joins a business, they typically contribute capital in exchange for a share of ownership in the business.
The other options are incorrect.
- Option B, loan, is incorrect because a loan is a debt that must be repaid. Goodwill is not a debt.
- Option C, drawings, is incorrect because drawings are withdrawals of money from a business by a partner. Goodwill is not a withdrawal of money.
- Option D, premium, is incorrect because a premium is an amount of money that is paid over the face value of a security. Goodwill is not a security.
I hope this helps!