The sum due to the retiring partner includes:
(A) His share of accumulated profits
(B) Amount due to the third party
(C) His share of goodwill
(D) Credit balance of his capital account
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A, C and D only
A retiring partner is paid what the firm owes him as a partner: his capital, his share of what the firm has built up and his share of profits and adjustments up to the date of retirement. Amounts owed to outsiders are the firm’s liabilities, not his dues.
(A) His share of accumulated profits Correct. Reserves and accumulated profits belong to all the partners, so his share of them is credited to him.
(B) Amount due to the third party Incorrect. This is an outside liability of the firm, owed to creditors and not to the retiring partner.
(C) His share of goodwill Correct. He is compensated for his share in the goodwill that the firm keeps after he leaves.
(D) Credit balance of his capital account Correct. It is the starting point of the amount due to him.
NCERT (2026-27 edition):
|
