Describe the conceptual differences between the bonus and go

Describe the conceptual differences between the bonus and goodwill methods.

Solution

Transaction in the partnership business consists of basically partner\'s investment, division of partners profit and losses, partner\'s withdrawal from the business and liquidation of the partnership. Except division of profit and losses and partnership liquidation other mentioned transaction are calculated on the basis of bonus or goddwill method. Treatment under each method is different. Division of profit and losses are based on the agreement between the partners.