The correct answer is: A. His share of goodwill.
Goodwill is an intangible asset that represents the value of a company’s reputation, customer base, and other factors that make it more valuable than the sum of its assets. When a partner retires or dies, the remaining partners must decide how to account for the goodwill. One option is to credit the retired or deceased partner’s capital account with his or her share of the goodwill. This is the most common approach, as it recognizes the value of the goodwill that the retiring or deceased partner contributed to the firm.
Another option is to write off the goodwill. This is less common, as it reduces the value of the firm’s assets. However, it may be necessary if the goodwill is no longer considered to be an asset.
The final option is to allocate the goodwill among the remaining partners. This is a more complex approach, as it requires the partners to agree on how to value the goodwill. However, it can be beneficial if the partners want to ensure that the goodwill is not lost when a partner retires or dies.
In conclusion, the correct answer to the question is A. His share of goodwill. This is the most common approach to accounting for goodwill when a partner retires or dies.