In the case of retirement of a partner, the item to be deducted from…

In the case of retirement of a partner, the item to be deducted from partner's capital account is.......

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Share of accumulated loss

The amount due to a retiring partner starts from his capital balance; his gains are added to it and his losses are deducted from it. Accumulated losses (a debit balance of Profit and Loss Account) were made while he was a partner, so his share of accumulated loss is deducted from his capital account.

Why the other options are incorrect

Option (1) Interest on capital — Incorrect. Interest on his capital up to the date of retirement is due to him, so it is credited (added), not deducted.
Option (2) Profit on revaluation — Incorrect. A gain on revaluation of assets and liabilities is shared by all partners, so his share is added to his capital.
Option (3) Share of general reserve — Incorrect. General reserve is an accumulated profit; his share of it is credited to his capital account.

NCERT (2026-27 edition):
Ascertaining the Amount Due to Retiring/Deceased Partner – “The sum due to the retiring partner (in case of retirement) and to the legal representatives/ executors (in case of death) includes: (i) credit balance of his capital account; (ii) credit balance of his current account (if any); (iii) his share of goodwill; (iv) his share of accumulated profits (reserves); (v) his share in the gain of revaluation of assets and liabilities; …”

NCERT (2026-27 edition):
Ascertaining the Amount Due to Retiring/Deceased Partner – “… (vii) interest on his capital, if involved, up to the date of retirement/death; and (viii) salary/commission, if any, due to him up to the date of retirement/death. The following deductions, if any, may have to be made from his share: (i) debit balance of his current account (if any); (ii) his share of goodwill to be written off, if necessary; (iii) his share of accumulated losses; …”

In the case of retirement of a partner, the item to be deducted from partner's capital account is.......

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Share of accumulated loss

Why the other options are incorrect

Option (1) Interest on capital — Incorrect. Interest on his capital up to the date of retirement is due to him, so it is credited (added), not deducted.
Option (2) Profit on revaluation — Incorrect. A gain on revaluation of assets and liabilities is shared by all partners, so his share is added to his capital.
Option (3) Share of general reserve — Incorrect. General reserve is an accumulated profit; his share of it is credited to his capital account.