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Cash Settlement with Retiring Partner

State whether...

Question

State whether the following statements are true or false :

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

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Solution

True

Explanation: Amount due to a retiring partner, if not paid, appears as his loan in the books of the firm, as it represents a liability that needs to be paid. Also, interest @ 6% p.a. is allowed till the date such amount remains outstanding.

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