An advantage of the recording the goodwill method over the bonus method is that an incoming partner eventually will end up with a greater capital balance.

Question

Quizplus · Accepted Answer

The recording of goodwill or using the bonus method affects the initial allocation of ownership interests and capital balances among partners, but it does not determine the eventual capital balance of an incoming partner, which can be influenced by future profits, losses, and additional contributions.

An Advantage of the Recording the Goodwill Method Over the Bonus