What is the key difference in the accounting treatment for the disposal of the amount due to a retiring partner and a deceased partner?
Answer & explanation
Correct answer: option 3
The correct answer is option 3: The amount credited to a retiring partner is transferred to the Retiring Partner's Loan Account, while the amount credited to a deceased partner is transferred to his Executors' Account.
The key difference in the accounting treatment for the disposal of the amount due to a retiring partner and a deceased partner is that the amount credited to a retiring partner is transferred to the Retiring Partner's Loan Account.
On the other hand, the amount credited to a deceased partner is transferred to his Executors' Account.