Partnership

Retirement/Death

Medium

common

Match List-I with List-II

List-I List-II
(Name of ratios.) (used for)
(A) old ratio. (I)distribution of premium for goodwill.
(B) new ratio. (II) for adjustment of goodwill in death of partner.
(C) sacrificing ratio. (III) sharing revaluation profits.
(D) gaining ratio. (IV) sharing future profits.

Choose the correct answer from the options given below:

List-I	List-II
(Name of ratios.)	(used for)
(A) old ratio.	(I)distribution of premium for goodwill.
(B) new ratio.	(II) for adjustment of goodwill in death of partner.
(C) sacrificing ratio.	(III) sharing revaluation profits.
(D) gaining ratio.	(IV) sharing future profits.

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 4

Old Ratio is the profit-sharing ratio among partners before any change occurs in the partnership. Since revaluation of assets and liabilities is done to record gains/losses that occurred during the old partnership period, these profits/losses are distributed in the old ratio. So (A) matches with (III).

New Ratio is the profit-sharing ratio among partners after a change has taken place in the partnership (admission, retirement, or death). This ratio determines how partners will share profits and losses in the future. So (B) matches with (IV).

Sacrificing Ratio represents the share given up by existing partners in favor of a new or existing partner. It is calculated as: $\text{Sacrificing Ratio} = \text{Old Ratio} - \text{New Ratio}$

When a new partner is admitted, they bring premium for goodwill which is distributed among the sacrificing partners in their sacrificing ratio as compensation. So (C) matches with (I).

Gaining Ratio represents the share acquired by continuing partners from a retiring or deceased partner. It is calculated as: $\text{Gaining Ratio} = \text{New Ratio} - \text{Old Ratio}$

When a partner retires or dies, the continuing partners who gain share must compensate for the goodwill through this ratio. The retiring/deceased partner's share of goodwill is adjusted among gaining partners. So (D) matches with (II).

The correct matching is:

(A) → (III)
(B) → (IV)
(C) → (I)
(D) → (II)

Correct Answer: Option 4

2022: 8 Aug Shift 2

In case of retirement or death of a partner, all accumulated profit and losses are transferred in capital account of partners in the:

2026: 20 May Shift 1

At the time of retirement of a partner, arrange the following accounts in the correct sequence.

(A) Partners' Current A/c

(B) Revaluation A/c

(D) Partners' Capital A/c

Choose the correct answer from the options given below:

2025: 31 May Shift 1

At the time of retirement of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:

2025: 30 May Shift 2

Keshav, Nirmal and Pankaj are partners sharing profits and losses in the ratio of 4 : 3 : 2. Nirmal retires and the goodwill is valued at Rs. 72,000. Keshav and Pankaj decided to share future profits and losses in the ratio of 5 : 3. Gaining Ratio of Keshav and Pankaj is:

2026: 19 May Shift 1

Which of the following statements are correct ?

(A) Retirement of a partner does not results into reconstitution of a firm.

(B) If the amount of any asset is understated, then the change, will be shown on the debit side of revaluation account.

(D) Revaluation of asset is necessary because present value of assets may be different from book value.

Choose the Correct Combinations :

2023: 28 May Shift 1

Identify the correct sequence to be followed at the time of Retirement of a Partner :

(A) New Balance Sheet after Retirement

(B) Transferring balance to Retiring partner's Loan Account

(D) Partners' Capital Account

(E) Preparation of Revaluation Account

Choose the correct answer from the options given below :

Solution

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