Retirement of a partner 1

A partner can retire from the firm with the consent of all other partners only

• True

• False

Family member of the retiring partner becomes the new partner in the reconstituted form

• True

• False

Profit or loss on revaluation of assets at the time of retirement of a partner is a capital profit

• True

• False

The amount due to the retiring partner is always settled in cash

• True

• False

The firm is under obligation to pay an agreed rate of interest for the unpaid balance to the retiring partner

• True

• False

The gain or loss shown by the revaluation account at the time of retirement of a partner is transferred to the capital account of all the partners in their (a)   ratio.

At the time of retirement, undistributed profits, losses and reserves are distributed among all the partners in their (a)   profit sharing ratio.

(a)   is the ratio in which the remaining partners take the share of the retiring partner.

A B and C are partners sharing profits in the ratio of 3: 2:1 C retired. New profit sharing ratio will be

• 1:3

• 3:2

• 1:1

• None of these