Adjustment of Partners’ Capitals

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Adjustment of Partners’ Capitals: Overview

This topic covers concepts such as, Adjustment of Partners’ Capitals etc.

Important Questions on Adjustment of Partners’ Capitals

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 1

Which account is credited when a retiring partner’s loan is settled?

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 2

What is the treatment of accumulated profits and reserves at the time of retirement of a partner?

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 3

How is the retiring partner’s share of profit or loss till the date of retirement determined?

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 4

When a partner dies, what happens to their capital account balance?

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 5

What is the capital account adjustment required when a partner retires and their share of goodwill is to be adjusted?

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Other Subjects>Reconstitution of a Partnership Firm – Retirement/Death of a Partner>Adjustment of Partners’ Capitals> Q 6

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
(C) Calculation Gaining/Sacrificing Ratio
(D) Partners' Capital Account
(E) Preparation of Revaluation Account

Choose the correct answer from the options given below: