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easyMCQCUET Accountancy 2025 3 June Shift 22026Accountancy
1 mark

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

  1. A
    His/her share of goodwill.
  2. B
    Goodwill of the firm.
  3. C
    Shares of goodwill of remaining partners.
  4. D
    Goodwill of another firm.

Solution & Step-by-step Explanation

Upon retirement or death, the outgoing partner is compensated for his share of the company's reputation. Therefore, his capital account is credited with his/her individual share of goodwill, which is funded by the gaining partners.

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On retirement/death of a partner, the retiring/deceased partner's capital account will be credited with:
A
His/her share of goodwill.
B
Goodwill of the firm.
C
Shares of goodwill of remaining partners.
D
Goodwill of another firm.

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PartnershipRetirement/DeathGoodwill Allocation

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