Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

If any partner has given a loan to the firm and now that partner died, then what will firm do with his loan amount?

Options:

Transfer to p & l account

Transfer to his current account ( debit side)

Transfer to his capital account (credit side)

Transfer to his capital account ( debit side)

Correct Answer:

Transfer to his capital account (credit side)

Explanation:

Loan to be returned to partner so it will be credited to his account to find out the final balance of partner.