In the case of retirement of a partner, the item to be deducted from partner's capital account is. Option 1: Interest on capital. Option 2: Profit on revaluation. Option 3: Share of general reserve. Option 4: Share of accumulated loss.

Answer: Share of accumulated loss. Solution: When a partner retires, various adjustments are made to their capital account before calculating the final amount payable to them. Items that are added (credited) to capital account: - Interest on capital increases the partner's capital - Profit on revaluation is shared among all partners including the retiring partner and increases their capital - Share of general reserve and accumulated profits are distributed to all partners and increase their capital Items that are deducted (debited) from capital account: - Share of accumulated losses must be written off by charging it to the partners' capital accounts in their profit sharing ratio Since accumulated losses represent past losses that were not distributed, they need to be adjusted at the time of retirement. The retiring partner must bear their share of these losses, which reduces their capital balance. The journal entry for distributing accumulated loss would be: All Partners' Capital A/cs Dr. To Profit & Loss A/c (Being accumulated loss distributed among partners in their profit sharing ratio) This debit entry reduces the retiring partner's capital account balance. After all adjustments including deduction of accumulated losses, the net balance in the retiring partner's capital account represents the amount payable to them. Correct Answer: Option 4 - Share of accumulated loss

Partnership

Retirement/Death

Easy

common

In the case of retirement of a partner, the item to be deducted from partner's capital account is.

Interest on capital.

Profit on revaluation.

Share of general reserve.

Share of accumulated loss.

✅ Correct Option: 4

When a partner retires, various adjustments are made to their capital account before calculating the final amount payable to them.

Items that are added (credited) to capital account:

Interest on capital increases the partner's capital
Profit on revaluation is shared among all partners including the retiring partner and increases their capital
Share of general reserve and accumulated profits are distributed to all partners and increase their capital

Items that are deducted (debited) from capital account:

Share of accumulated losses must be written off by charging it to the partners' capital accounts in their profit sharing ratio

Since accumulated losses represent past losses that were not distributed, they need to be adjusted at the time of retirement. The retiring partner must bear their share of these losses, which reduces their capital balance.

The journal entry for distributing accumulated loss would be:

All Partners' Capital A/cs Dr.

To Profit & Loss A/c

(Being accumulated loss distributed among partners in their profit sharing ratio)

This debit entry reduces the retiring partner's capital account balance. After all adjustments including deduction of accumulated losses, the net balance in the retiring partner's capital account represents the amount payable to them.

Correct Answer: Option 4 - Share of accumulated loss

2025: 3 June Shift 1

In the case of a re-constitution of a partnership firm, if the value of decrease in investment exceeds the Investment Fluctuation Fund, the :-

2026: 21 May Shift 1

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2026: 21 May Shift 1

Bhim, Swati and Adita are partners sharing profits and losses in the ratio of 5:3:2 respectively. On March 31, 2025, Swati retired. Revaluation of assets and reassessment of liabilities resulted in a loss of Rs. 1,90,000. Journal entry for this would be:

2025: 13 May Shift 2

Naveen, Suresh and Tarun are partners sharing profits and losses in the ratio of 5:3:2. Suresh retires from the firm and his share was acquired by Naveen and Tarun in the ratio 2:1. The new profit sharing ratio is

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On retirement of a partner, the retiring partner's capital account will be credited with _____

2025: 22 May Shift 1

In the absence of any information regarding the acquisition of share in profits of the retiring/deceased partner by the remaining partners, it is assumed that they will acquire his/her share in________.

In the case of retirement of a partner, the item to be deducted from partner's capital account is.

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