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What is the main reason for transferring the unpaid amount due to a retiring partner to a loan account?

Answer and explanation

Correct answer: Because the firm will pay it later

The firm is not paying immediately so it becomes a loan payable later. Exam tip: treat unpaid amount due as a liability.

Related tags

Loan AccountRetirementSettlementPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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