Question : Which of the following statements is correct?
Option 1: Loan to Partner Account and Loan by Partner Account may be transferred to his Executor’s Account
Option 2: Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
Solution : Answer = Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
When a partner's loan account is settled, the amount can be transferred to their capital account, reflecting the conversion of the loan into equity in the partnership. This aligns with the principles of partnership accounting.
Hence, the correct option is 2.
