Question

State whether the following statements is true or false :
The capital account of a retiring partner always shows a debit balance.

Options

• True

• False

Answer 1

False

Explanation: The capital account of a retiring partner may show a debit balance sometimes if the amount to be paid to him is less than the amount withdrawn by him from the firm. However, it is not necessary that the capital account of a retiring partner will always show a debit balance.