Accountancy Part AReconstitution of Partnership Firm: Retirement and Death

From the following options, select the deductions to be made from the…

From the following options, select the deductions to be made from the share of a partner at the time of his/her retirement.

(A) Debit balance of his current account

(B) Share of goodwill to be written off

(D) Share of loss on revaluation of assets and liabilities

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (A), (B), (C) and (D)

Whatever the retiring partner already owes the firm, or has to bear along with the other partners, is deducted from the amount due to him. All four items are of this kind.

(A) Debit balance of his current account Correct. He has drawn more than he was entitled to, so the excess is deducted.

(B) Share of goodwill to be written off Correct. When goodwill appearing in the books is written off, he bears his share of it.

(C) Share of accumulated losses Correct. Accumulated losses belong to all the partners, so his share reduces his claim.

(D) Share of loss on revaluation of assets and liabilities Correct. A loss on revaluation is borne by every partner in the old ratio, the retiring partner included.

NCERT (2026-27 edition):
Ascertaining the Amount Due to Retiring/Deceased Partner – “… The following deductions, if any, may have to be made from his share: (i) debit balance of his current account (if any); (ii) his share of goodwill to be written off, if necessary; (iii) his share of accumulated losses; (iv) his share of loss on revaluation of assets and liabilities; (v) his share of loss up to the date of retirement/death; (vi) his drawings up to the date of retirement/death; (vii) interest on drawings, if involved, up to the date of retirement/death.”