A retiring partner's loan account had a credit balance of ₹72000, but ₹90000 was paid through bank. There was no interest. What does this indicate?

Correct answer: ₹18000 overpayment or error

The direct answer is A: there is an overpayment of ₹18000 or an error. A credit balance of ₹72000 means the firm owes the retiring partner ₹72000. The question explicitly says that there is no interest, so no extra amount can be added for interest. The bank payment was ₹90000. Comparing the payment with the liability gives ₹90000 − ₹72000 = ₹18000. Therefore the payment exceeds the recorded amount due by ₹18000. Option A is correct because the difference must be investigated as an overpayment, posting mistake, or some omitted adjustment. Option B is wrong because the question says there was no interest, and no other fact creates interest of ₹18000. Option C is wrong because the stated credit balance, not the payment made, represents the recorded liability; a payment does not automatically prove that ₹90000 was due. Option D is wrong because ₹72000 is a liability owed to the partner, not income earned by the firm. The correct accounting response is to check the loan account, payment voucher, and any omitted interest or adjustment before accepting the figure. Memory cue: compare amount paid with closing liability; payment greater than liability means check the difference.