These are the options for the Question: Nita, Suman and Harish were partners in a firm sharing profits in the ratio of 3 :@): 1. Suman retired from the firm. On the date of Suman’s
retirement, % 30,000 was due to her. The remaining partners decided to pay her in three yearly instalments starting from the end of the first year. % 30,000 will be transferred to which of the following account :
(A) Suman’s Loan Account (B) Suman’s Executor’s Accounts
(C) Suman’s Bank Account (D) Suman’s Current Account
The correct answer is –
When Suman retires, her share of the profits up to that date will be credited to her capital account, and any amount due to her as per the partnership agreement will be transferred to a separate account known as “Suman’s Loan Account” or “Suman’s Capital Account” (depending on the accounting practice followed by the firm).
In this case, %30,000 is due to Suman on the date of her retirement, and the remaining partners have decided to pay her in three yearly installments starting from the end of the first year. This means that Suman’s loan account will be debited by %30,000 on the date of her retirement, and this amount will be transferred to her bank account at the end of the first year.
At the end of the first year, Suman’s loan account will be credited by %10,000 (which is one-third of %30,000), and her bank account will be debited by the same amount. The same will be repeated at the end of the second and third years, until the entire amount due to Suman is paid off.
Therefore, %30,000 will be transferred to Suman’s Loan Account. Option (A) Suman’s Loan Account is the correct answer.
