On retirement/death of a partner, the retiring/deceased partner's capital account will be credited with:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → His/her share of goodwill
The outgoing partner helped build the goodwill, so he is paid for his own share of it; the remaining partners, who gain his share of future profits, bear it in their gaining ratio.
NCERT (2026-27 edition):
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