On retirement of a partner, the retiring partner's capital account will be credited with :
Answer & explanation
Correct answer: option 1
The correct answer is option 1-His/her share of goodwill.
On retirement of a partner, the retiring partner's capital account will be credited with his/her share of goodwill.
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
(iii) his share of goodwill
(iv) his share of accumulated profits (reserves)
(v) his share in the gain of revaluation of assets and liabilities