Question

Write the term / word / phrase which can substitute each of the following statement :

Capital account of a retiring partner always shows balance.

Answer 1

Credit balance

Explanation: The capital account of a retiring partner always shows credit balance. This is because the amount due to him in the form of share in profits of revaluation account, share of goodwill, accumulated profits and reserves, etc. is always more than the amount which decreases his claim such as drawings, share in accumulated losses, etc.