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Home Questions H8HVEH3682
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

Where will the retiring partner's loan account be shown in the partnership accounts?

Options:

Assets side of B/S

Liabilities side of B/S

Debit side of P & L A/c

Credit side of P & L A/c

Correct Answer:

Liabilities side of B/S

Explanation:

The correct answer is option 2- Liabilities side of B/S.

The balance of the retiring partner’s loan account is shown on the liabilities side of the Balance Sheet till the last installment is paid to him/her.

When a partner retires and the firm is not able to immediately pay their due amount, the amount payable is transferred to the Retiring Partner’s Loan Account. This amount becomes a liability for the firm until it is paid off.

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