Cheat sheet · Class 12 · CBSE · Commerce Accountancy
Reconstitution of a Partnership Firm – Retirement/Death of a Partner cheat sheet
The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.
CBSE Class 12 · Accountancy
Cheat sheet
Chapter 3Retirement/Death of a Partner
Gaining ratio = new share − old share; gainers compensate the outgoing partner for goodwill.
1. Gaining Ratio
Gaining partners debit their capital accounts; retiring partner's capital is credited with their goodwill share.
2. Settlement
- Revaluation and reserves shared by all partners (old ratio).
- Amount due paid in cash or transferred to a loan account (interest per deed or 6%).
3. Death of a Partner
| Item | Credited to deceased's executor |
|---|---|
| Capital & current balance | yes |
| Share of goodwill | yes |
| Share of profit till death | time basis or turnover basis |
| Interest on capital | till date of death |
Profit share till death: debit P&L Suspense A/c.
4. Key Points
- Joint life policy: surrender value is an asset.
- Executor's account closed on payment.
- Retirement may change continuing partners' ratio.
- Adjust capitals if required.
Remember: Gaining ratio | goodwill compensation | executor account
Reconstitution of a Partnership Firm – Retirement/Death of a Partner: questions and notes
More Class 12 · CBSE · Commerce Accountancy cheat sheets
- Accounting for Partnership Firms – Fundamentals
- Reconstitution of a Partnership Firm – Admission of a Partner
- Reconstitution of a Partnership Firm – Retirement/Death of a Partner
- Dissolution of Partnership Firm
- Accounting for Share Capital
- Issue and Redemption of Debentures
- Financial Statements of a Company
- Analysis of Financial Statements
- Accounting Ratios
- Cash Flow Statement
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