Question

Assertion (A): In case of retirement of a partner, goodwill is credited to all partners Capital accounts in old ratio.

Reason (R): In case of retirement of a partner, his share of goodwill is credited to retiring partner’s capital account and debited to continuing partners in their sacrificing ratio.

In the context of the above two statements, which of the following is correct?

Options

• Both (A) and (R) are correct and (R) is the correct reason of (A).

• Both (A) and (R) are correct but (R) is not the correct reason of (A).

• Only (R) is correct.

• Both (A) and (R) are wrong.

Answer 1

Both (A) and (R) are wrong.