Accountancy

Retirement & Death of a Partner

Questions Bank

  • Section 32(1) states retirement of partner by (a) By Consent of all other partner, (b) As per Agreement, (c) By Notice.
    2018-02-12 16:53:29
  • Section 32 (2) states liability for the act before retirement. A partner remain liable for the act done upto the date of retirement.
    2018-02-12 16:53:15
  • Section 32(3) states liability for the act after retirement. A retiring partner is liable to third party for the act after his retirement until a public notice of his retirement is given.
    2018-02-12 16:53:00
  • New Profit Sharing Ratio, after retirement of a partner the ratio in which the continuing partner decide to share future profit or loss.
    Symbolically, NR = OR + Acquired Gaining Share.

    2018-02-12 16:52:46
  • Gaining Ratio, is the ratio in which the continuing partner acquire the outgoing patner's share. Symbolically Gaining Ratio = New Share - Old Share.
    2018-02-12 16:52:22
  • Item Credited to Partner's Capital A/c are (i) Opening Bal. (ii) Profit on Revaluation, (iii) Goodwill Share, (iv) Accumulated Profits, (v) Interest on Capital, (vi) Salary and Commission.
    2018-02-12 16:52:03
  • Items Debited to Partner's Capital A/c, (i) Drawing and Interest thereon, (ii) Share of Accumulated Loss, (iii) Share in Loss of Revaluation Account.
    2018-02-12 16:51:20
  • Section 37 relates to the Provision if full or part amount of outgoing partner still remains to be paid. (i) If mutually agreed then interest or share in profit, (ii) If nothing is agreed then interest @ 6% p.a. on balance amount.
    2018-02-12 16:50:50

  • 2018-02-12 16:36:45

Questions Bank -

Ans. Retirement of a partner refers to discontinuation of a partner from the partnership firm. A partner leaving the firm is known as retiring partner or an outgoing partner.

Ans. There is change in the relations of the partners and reconstitution of the partnership firm takes place.

Ans. The two rights of a retiring partner.
(i) Right to get his share in the goodwill of the firm.
(ii) Right to receive his capital and share in accumulated profits of the firm.

Ans. Yes, the retiring is liable for the firm's transactions before his retirement.

Ans. No, if retiring partner is not liable for any transaction accounted after his retirement. The retiring partner has to give public notice of his retirement.

Ans. The matter that need adjustment at the retirement of a partner.
(i) Determination of new profit sharing ratio.
(ii) Revaluation of assets and liabilities.

Ans. The ratio in which remaining partners will share the future profits and losses.

Ans. The new profit sharing ratio is calculated for remaining partners so that the gaining portion of the retiring partner's share in profits could be shared.

Ans. New Profit Sharing Ratio = Old Ratio + Gaining Ratio.



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