Manav and Daksh were partners sharing profits and losses in the ratio of 5 : 3. Their firm was dissolved on March 31, 2023. On the date of dissolution, Daksh’s Loan to the firm amounted to ₹ 80,000 and was settled at ₹ 75,000. Assertion (A): Daksh’s Loan will be debited by ₹ 75,000 only. Reason (R): Daksh’s Loan to be closed only by the amount paid to him.

Question

KollegeApply · Accepted Answer

Both A and R are correct and R is the correct explanation of (A). Explanation: Daksh’s loan account will be debited by the amount actually paid to him (₹ 75,000). This is because the loan can only be closed by the amount that is paid to the partner, not the amount initially owed (₹ 80,000). Hence, the loan is settled at ₹ 75,000 and debited accordingly, matching the reason (R) with the assertion (A).

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