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easyMCQCUET Accountancy 2025 22 May Shift 12026Accountancy
1 mark

In the event of retirement of a partner, which of the following deductions has to be made from his/her share?

  1. A
    Debit balance of his current account (if any)
  2. B
    Credit balance of his capital account
  3. C
    Credit balance of his current account (if any)
  4. D
    His/Her share of goodwill

Solution & Step-by-step Explanation

Credit balances of capital/current accounts or shares of goodwill are items that add value to what is owed to the retiring partner. Conversely, a debit balance in their current account reflects a debt they owe back to the firm, hence it acts as a direct deduction from their net settlement payout.

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Try it yourself before checking the explanation above.

In the event of retirement of a partner, which of the following deductions has to be made from his/her share?
A
Debit balance of his current account (if any)
B
Credit balance of his capital account
C
Credit balance of his current account (if any)
D
His/Her share of goodwill

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PartnershipRetirement/DeathCapital Adjustments

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