If old partners withdraw only half of their credited premium, what will be the effect on their capital accounts?

Correct answer: Half credit will remain

The direct answer is option A: Half credit will remain. When the new partner brings a goodwill premium, the old partners are credited for the amount they are entitled to receive according to the sacrificing ratio. If the full credited amount is not withdrawn, the withdrawn part reduces cash and the unwithdrawn part continues to remain in the partners’ capital accounts. Suppose the premium credited to old partners is ₹20,000 in total. If they withdraw only half, ₹10,000 is withdrawn and ₹10,000 remains credited in their capital accounts. Option A is correct because only half of the credit has been removed. Option B, full credit will be removed, would be true only if the entire credited amount were withdrawn. Option C, capital will double, is not supported; withdrawal or retention does not automatically double capital. Option D, bank will have no effect, is wrong because the amount withdrawn is paid through bank, so bank balance decreases by the withdrawn amount. The important distinction is between crediting the premium and withdrawing it. Memory cue: unwithdrawn credit stays in capital; withdrawal affects bank.