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 ________ratio.

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

________ 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