Question

Cash paid on settlement of retiring partners claim is credited to _____.

• A. Cash A/c
• B. Partners Capital A/c
• C. Retiring Partner Capital A/c
• D. None of the above

Answer 1

Answer: (A)

Cash A/c

Cash is a real account. Rule for the real account is as under:

Debit what comes in

Credit what goes out

Cash paid to partner at the time of retirement. Accordingly journal entry will be passed as:

Partner's Capital A/c Dr.

To Cash A/c