Reconstitution of a Partnership Firm – Retirement/Death of a Partner

If a partner retires on 1st April 2026 and the firm agrees to pay his total claim of ₹1,00,000 in two equal annual installments along with interest at 10% per annum, what will be the total interest paid at the end of the first year?

1. ₹10,000
2. ₹5,000
3. ₹20,000
4. ₹6,000

X, Y, and Z were partners. Y retired. At the time of retirement, Joint Life Policy (JLP) surrender value was ₹60,000. How should this surrender value be treated?

1. Credited to Y's Capital Account only
2. Credited to X and Z's Capital Accounts in gaining ratio
3. Credited to All Partners' Capital Accounts in old ratio
4. Debited to Revaluation Account

At the time of death of a partner, the balance in the Deceased Partner's Capital Account is transferred to:

1. Deceased Partner's Loan Account
2. Executor's Account
3. Remaining Partners' Capital Accounts
4. Suspense Account

Gaining ratio is used to distribute which of the following amounts at the time of retirement of a partner?

1. General Reserves
2. Goodwill payable to retiring partner
3. Revaluation Profit
4. Accumulated Losses

If the death of a partner occurs on 30th September and sales during the 6-month period were ₹4,00,000. Last year's total sales were ₹10,00,000 and net profit was ₹2,00,000. What is the deceased partner's share of profit if his profit share is 1/2?

1. ₹40,000
2. ₹80,000
3. ₹20,000
4. ₹1,00,000

The legal representative of a deceased partner is NOT entitled to receive which of the following items?

1. Share in general reserves
2. Share in revaluation profit
3. Share in goodwill of the firm
4. Unpaid salary of surviving partners

A, B, and C are equal partners. C dies on 30th June 2026. The profits for the previous year ended 31st March 2026 were ₹1,20,000. If profit share is calculated on the basis of previous year's profit, what is C's share of profit up to date of death?

1. ₹10,000
2. ₹30,000
3. ₹40,000
4. ₹15,000

On the death of a partner, the deceased partner's share of profit from the beginning of the financial year up to the date of death is credited to his capital account by debiting:

1. Profit and Loss Appropriation Account
2. Profit and Loss Suspense Account
3. Revaluation Account
4. Realisation Account

A, B, and C are partners. B retires. The total capital of the newly constituted firm is fixed at ₹3,00,000, to be shared by A and C in their new profit-sharing ratio of 2:1. If A's existing adjusted capital is ₹1,80,000, what action must A take?

1. Withdraw ₹20,000 cash
2. Bring in ₹20,000 cash
3. Withdraw ₹30,000 cash
4. Bring in ₹30,000 cash

Section 37 of the Indian Partnership Act, 1932 provides that an outgoing partner is entitled to interest at what rate per annum on the unpaid balance until final settlement, if no agreement exists?

1. 6% per annum
2. 10% per annum
3. 12% per annum
4. 5% per annum

If the total amount due to a retiring partner is not paid immediately in cash, to which account is the remaining balance transferred?

1. Retiring Partner's Current Account
2. Retiring Partner's Loan Account
3. Realisation Account
4. General Reserve Account

At the time of retirement of a partner, profit or loss on revaluation of assets and liabilities is transferred to the capital accounts of:

1. Only continuing partners in their gaining ratio
2. All partners (including retiring partner) in their old profit-sharing ratio
3. Only continuing partners in their new profit-sharing ratio
4. Retiring partner only in full

P, Q, and R are partners sharing profits in the ratio of 3:2:1. R retires, and the new profit-sharing ratio between P and Q is agreed at 2:1. What is the gaining ratio between P and Q?

1. 3:2
2. 1:1
3. 2:1
4. 1:2

X, Y, and Z are partners sharing profits in the ratio of 5:3:2. Y retires, and the goodwill of the firm is valued at ₹1,20,000. What entry will be passed for adjusting Y's share of goodwill if no goodwill account appears in the books?

1. Debit Y's Capital A/c ₹36,000; Credit X's Capital A/c ₹25,714 and Z's Capital A/c ₹10,286
2. Debit X's Capital A/c ₹25,714 and Z's Capital A/c ₹10,286; Credit Y's Capital A/c ₹36,000
3. Debit X's Capital A/c ₹25,714; Credit Y's Capital A/c ₹25,714
4. Debit Goodwill A/c ₹1,20,000; Credit All Partners' Capital A/cs ₹1,20,000

A, B, and C are partners sharing profits and losses in the ratio of 4:3:2. B retires from the firm, and his share is taken over by A and C in the ratio of 2:1. What is the new profit-sharing ratio of A and C?

1. 5:4
2. 2:1
3. 3:1
4. 6:3