Question

Amount due to a retiring partner if not paid, appears as his loan in the books of the firm. (State True or False)

Answer 1

I THINK

YES ...

BECAUSE IT IS A LIABILITY OF THE BUSINESS

Answer 2

Answer:

True

Explanation:

Amount due to a retiring partner if not paid, appears as his loan in the books of the firm. - True

The retiring partner is entitled to its share of earnings or losses that occurred up to the date of retirement. By debiting the Profit & Loss Suspense Account and crediting the Capital Account of the Retiring Partner, such shares are dispensed to the retiring partner. Amount owing to a retirement partner, if not paid, appears in the company's books as his credit, as it constitutes a liability to be paid. Also interest @ 6% p.a. It is permitted until such time as that quantity remains exceptional.