Question :
Accumulated losses on the retirement of a partner are
Option 1:
credited to all Partners’ Capital Accounts in old profit-sharing ratio.
Option 2:
debited to all Partners’ Capital Accounts in the old profit-sharing ratio.
Option 3: credited to remaining Partners’ Capital Accounts in new profit-sharing ratio.
Option 4: credited to remaining Partners’ Capital Accounts in gaining ratio.
Correct Answer:
Solution : Answer = debited to all Partners’ Capital Accounts in the old profit-sharing ratio.
Accumulated losses on the retirement of a partner are debited to all Partners' Capital Accounts in the old profit-sharing ratio. This ensures that the losses are allocated among the partners based on their previous profit-sharing arrangement, maintaining fairness and transparency in the distribution of the financial impact of the retirement. Hence, the correct option is 2.
Question : What happens to accumulated earnings and losses when a partner retires?
Option 1: Debited to all partner’s capital accounts in old ratio.
Option 2: Credited to all partner’s capital accounts in old ratio.
Option 3: Credited to remaining partner’s capital accounts in new ratio.
Option 4: Credited to remaining partner’s capital accounts in gaining ratio.
At the time of retirement of a partner, profit (gain) on revaluation will be credited to the Capital Accounts of
Option 1: retiring partner.
all partners in their old profit-sharing ratio.
Option 3:
the remaining partners in their old profit-sharing ratio.
Option 4:
the remaining partners in their new profit-sharing ratio.
Which of the following statement is correct?
Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in sacrificing ratio.
Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in gaining ratio.
Option 3: Goodwill at the time of retirement of a partner is debited to remaining Partners' Capital Accounts in sacrificing ratio.
Goodwill at the time of retirement of a partner to the extent of retiring Partner's Share is debited to remaining Partners’ Capital Accounts in gaining ratio.
Question : Reserves, Accumulated (Undistributed) Profits And Losses will be
Option 1: Distributed in remaining partner’s capital account
Option 2: Distributed among all partner’s capital account in old ratio
Option 3: Distributed among all partner’s capital account in New profit sharing ratio
Option 4: Distributed among old partners capital account in gaining ratio
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