Question 12 of 38beginner🧠 RememberMCQ1 mark

On retirement/death of a partner, the retiring/deceased partner’s capital account will be credited with

Exercise: Test your Understanding – II | Q: 1 | (Page 13)
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Explanation

Option (A) is correct. The provided text explicitly states under the section 'Ascertaining the Amount Due to Retiring/Deceased Partner' that the sum due to the retiring partner includes 'his share of goodwill'. Therefore, the retiring or deceased partner's capital account is credited with their specific share of goodwill, not the total goodwill of the firm.

Solution Steps

  1. Step 1: Refer to the section 'Ascertaining the Amount Due to Retiring/Deceased Partner' in the provided context.

  2. Step 2: Note that item (iii) lists 'his share of goodwill' as a component of the sum due to the partner.

  3. Step 3: Conclude that the partner's capital account is credited with 'his/her share of goodwill', which corresponds to Option (A).

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