Upon the retirement of an existing partner from a firm, the retiring partner's Capital Account will be credited with which of the following elements?(A) His/Her Capital Balance(B) His/Her share of premium for goodwill(C) Share of goodwill of remaining partners(D) His/Her share of accumulated reserves(E) His/Her drawingsChoose the correct answer from the options given below:
- A(A), (B) and (C) only
- B(A), (B) and (D) only
- C(B), (C) and (D) only
- D(C), (B) and (D) only
Solution & Step-by-step Explanation
Items that increase a partner's capital balance are credited, while items reducing it are debited.Credits to Retiring Partner's Capital Account: Existing opening credit balance (A), their earned portion of firm goodwill contributed by gaining partners (B), and their proportional share of undistributed accumulated reserves (D).Debits: Drawings (E) are debited because they reduce the total capital balance. Item (C) is conceptually incorrect since they receive only their own share.