Reconstitution of a Partnership Firm - Retirement/Death of a Partner
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Preview questions
1. What is the primary effect of a partner's retirement on the partnership?
Increase in profit sharing ratio · Change in partnership deed · Dissolution of the firm · Reduction in capital
2. Which account is credited when a partner retires?
Retirement Account · Partner's Capital Account · Revaluation Account · Goodwill Account
3. What happens to the goodwill of the firm when a partner retires?
It is ignored · It is revalued · It is written off · It is distributed among partners
4. Upon retirement, how is the share of the retiring partner calculated?
Based on fixed capital · Based on profit sharing ratio · Based on current market value · Based on the balance sheet
5. What is the treatment of accumulated profits at the time of a partner's retirement?
Transferred to Revaluation Account · Distributed among remaining partners · Ignored completely · Added to Goodwill
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