Partnership

Retirement/Death

Easy

common

Section 49, of the Indian Partnership Act 1932, deals with

Treatment of losses

Application of Assets

Provision of Indian Partnership Act 1932

Private Debts and Firm's Debts

✅ Correct Option: 4

Section 49 of the Indian Partnership Act 1932 deals with Private Debts and Firm's Debts.

This section establishes the principle of distinction between:

Debts owed by the partnership firm
Private/personal debts owed by individual partners

The key provisions under Section 49 are:

Firm's Assets → First applied to pay firm's debts. Any surplus can then be applied to private debts of partners.

Partner's Private Assets → First applied to pay the partner's private debts. Any surplus can then be applied to firm's debts.

This section protects the interests of both firm's creditors and partners' private creditors by maintaining a clear separation. The firm's creditors have the first claim on firm's assets, while a partner's personal creditors have the first claim on that partner's private property.

This becomes particularly important during dissolution of a firm or when settling accounts, ensuring that each category of creditors receives their dues in the proper order from the appropriate source of assets.

2025: 14 May Shift 2

Arrange the following steps involved in various accounting aspects of retirement/death of a partner in a sequence -

(A) Settlement of the amounts due to retired/deceased partner

(B) Ascertainment of new profit sharing ratio and gaining ratio

(D) Revaluation of assets and liabilities

Choose the correct answer from the options given below:

2025: 13 May Shift 2

The sum due to the retiring partner and to the legal representatives/executors (in case of death) includes the following, in addition to credit balance of his capital/current A/c, share of goodwill, gain on revaluation of assets and liabilities.

2025: 14 May Shift 1

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: 13 May Shift 2

When a Partner dies in the Middle of the Year, which accounting adjustment / calculation is not done for the intervening period?

2025: 3 June Shift 2

P, Q and R share profits equally. At the time of P's retirement, goodwill appears in the books at Rs. 3000. P will be credited with ___ amount for Goodwill share.

2026: 29 May Shift 2

Puja, Priya, Pratistha are partners sharing profits and losses in the ratio of 5 : 3 : 2. Priya retires. Her share is taken by Puja and Pratistha equally. Calculate the gaining ratio.

Section 49, of the Indian Partnership Act 1932, deals with

Solution

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