Question

On retirement, the retiring partner’s capital account will be credited with:
(A) His/Her Capital Balance
(B) His/Her share of goodwill
(C) Share of goodwill of remaining partners
(D) his/her share of Reserve
(E) his/her drawings
Choose the correct answer from the options given below :

• A. (A), (B) and (C) only
• B. (A), (B) and (D) only
• C. (B), (C) and (D) only
• D. (C), (B) and (D) only

Hint:

Be mindful of credits and remember to look over every option provided.

Answer 1

The Correct Option is B

Understanding the items which has to be credited from the retirement of a partners in the capital: In retirement of a partner, to ensure smooth movement of funds and records.
Explanation:
His/Her Capital Balance Credit with the capital amount that the partner already owns.
His/Her share of goodwill Credit with the share that relates only to the particular partner, other partners, won't influence the statement.
His/Her share of reserves *His share of reserves has to be accounted. The item "His/Her drawings" won't influence the account because that's has nothing to do with retirement.