Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

What adjustments be done at the time of retirement of a partner in a partnership firm?

Options:

Capital

Profit-sharing

Revaluation

All of these

Correct Answer:

All of these

Explanation:

Similar to admission, the various accounting aspects involved on retirement or death of a partner are as follows:
1. Ascertainment of new profit sharing ratio and gaining ratio;
2. Treatment of goodwill;
3. Revaluation of assets and liabilities;
4. Adjustment in respect of unrecorded assets and liabilities;
5. Distribution of accumulated profits and losses;
6. Ascertainment of share of profit or loss up to the date of retirement/death;
7. Adjustment of capital, if required;
8. Settlement of the amounts due to retired/deceased partner