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Partnership Accounts  
(Retirement of a Partner) 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 4 
Prof. Deepak Jaggi 
Page 2


Partnership Accounts  
(Retirement of a Partner) 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 4 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the role of retiring partner in  
the obligations of the firm. 
(2) Logic of treatment of Reserves  and Debit 
Balances in case of retirement of partner. 
(3) Techniques of arriving at the various 
Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting 
treatment in case of retirement of partner. 
Page 3


Partnership Accounts  
(Retirement of a Partner) 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 4 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the role of retiring partner in  
the obligations of the firm. 
(2) Logic of treatment of Reserves  and Debit 
Balances in case of retirement of partner. 
(3) Techniques of arriving at the various 
Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting 
treatment in case of retirement of partner. 
PARTNERSHIP ACCOUNTS 
(Retirement of a Partner) 
A partner who retires from the existing partnership 
firm is known as a retiring partner 
A partner who retires will be called as outgoing 
partner 
Page 4


Partnership Accounts  
(Retirement of a Partner) 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 4 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the role of retiring partner in  
the obligations of the firm. 
(2) Logic of treatment of Reserves  and Debit 
Balances in case of retirement of partner. 
(3) Techniques of arriving at the various 
Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting 
treatment in case of retirement of partner. 
PARTNERSHIP ACCOUNTS 
(Retirement of a Partner) 
A partner who retires from the existing partnership 
firm is known as a retiring partner 
A partner who retires will be called as outgoing 
partner 
Conti.. 
(Retirement of a Partner) 
A partner may retire from the business due to one or more of the following 
reasons: 
Old age  or Health  problems of the partner 
Better Opportunity 
Difference of opinion among partners 
Page 5


Partnership Accounts  
(Retirement of a Partner) 
CPT Section A Fundamentals of Accountancy Chapter 8 Unit 4 
Prof. Deepak Jaggi 
Learning Objectives 
 
(1) Understand the role of retiring partner in  
the obligations of the firm. 
(2) Logic of treatment of Reserves  and Debit 
Balances in case of retirement of partner. 
(3) Techniques of arriving at the various 
Ratio’s. 
(4) Understand the Goodwill adjustment. 
(5) To Lay a solid foundation of accounting 
treatment in case of retirement of partner. 
PARTNERSHIP ACCOUNTS 
(Retirement of a Partner) 
A partner who retires from the existing partnership 
firm is known as a retiring partner 
A partner who retires will be called as outgoing 
partner 
Conti.. 
(Retirement of a Partner) 
A partner may retire from the business due to one or more of the following 
reasons: 
Old age  or Health  problems of the partner 
Better Opportunity 
Difference of opinion among partners 
Accounting Treatment 
Not Same 
• Similar to Admission of Partner 
Information 
given 
• 1. Balance Sheet of Old Firm 
• 2. Adjustments 
To Prepare 
• 1. Revaluation A/c 
• 2. Partner’s Capital A/c 
• 3. Cash /Bank A/c 
• 4. Balance Sheet of a new Firm 
Read More
41 videos|111 docs|56 tests

FAQs on PPT : Retirement of Partner - Accountancy Class 12 - Commerce

1. What is retirement of a partner in a business?
Ans. Retirement of a partner in a business refers to the process in which a partner voluntarily withdraws from the partnership. It involves the cessation of the partner's involvement in the day-to-day operations and sharing of profits and losses.
2. What are the common reasons for a partner to retire from a business?
Ans. There can be various reasons for a partner to retire from a business, including personal reasons such as health issues or family commitments, professional reasons such as pursuing a different career path, or financial reasons such as wanting to enjoy the proceeds from the sale of their partnership interest.
3. How does the retirement of a partner affect the financial aspects of the business?
Ans. The retirement of a partner can have significant financial implications for the business. It may require the revaluation of assets and liabilities, redistribution of profits and losses among the remaining partners, and adjustment of capital accounts. The retiring partner may also be entitled to receive a share of the partnership's accumulated profits or the value of their capital contribution.
4. What are the legal and procedural requirements for the retirement of a partner?
Ans. The legal and procedural requirements for the retirement of a partner may vary depending on the jurisdiction and the terms of the partnership agreement. Generally, the retiring partner must provide a written notice of their intention to retire, and the partnership agreement may outline the steps to be followed for the retirement process, such as valuation of the partner's interest and the timeline for settlement.
5. How does the retirement of a partner impact the continuity and management of the business?
Ans. The retirement of a partner can disrupt the continuity and management of the business, especially if the retiring partner was actively involved in the day-to-day operations or held key managerial roles. The remaining partners may need to reassign responsibilities and make necessary adjustments to ensure the smooth functioning of the business. It may also be an opportunity to bring in new partners or restructure the partnership to accommodate the changes.
41 videos|111 docs|56 tests
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