The sum due to the retiring partner in case of retirement and to the legal representatives/ executors in case of death includes:
A. His share of goodwill
B. Credit balance of his current account
C. Salary/commission, if any
D. Provision for doubtful debts
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
Correct answer: Option (4) → A, B and C only
Concept: The sum due to a retiring/deceased partner includes his capital, share of goodwill, reserves and profits, revaluation gain, salary/commission due and the credit balance of his current account – per Reconstitution of a Partnership Firm – Retirement/Death of a Partner.
So it includes A (share of goodwill), B (credit balance of current account) and C (salary/commission, if any). Provision for doubtful debts (D) is only an adjustment against debtors during revaluation – it is not an amount payable to the partner. Hence A, B and C only.