CBSE Class 12 Retirement or Death of a Partner

Scroll down for PDF

CBSE Class 12 Retirement or Death of a Partner. Learning the important concepts is very important for every student to get better marks in examinations. The concepts should be clear which will help in faster learning. The attached concepts made as per NCERT and CBSE pattern will help the student to understand the chapter and score better marks in the examinations.


Retirement/Death of a Partner


Like admission and change in profit sharing ratio, in case of retirement or death also the existing partnership deed comes to an end and the new one comes into existence among the remaining partners. There is not much difference in the accounting treatment at the time of retirement or in the event of death.

 Amount due to retiring deceased Partner

(To be credited to his capital account)

1. Credit Balance of his capital.

2. Credit Balance of his current account (if any)

3. Share of Goodwill.

4. Share of Reserves or Undistributed profits.

5. His share in the profit revaluation of assets and liabilities.

6. Share in profits upto the date of Retirement/Death.

7. Interest on capital if involved.

8. Salary if any

Deduction from the above sum (to be debited to the capital account)

1. Debit balance of his current account (if any)

2. Share of Goodwill to be written off.

3. Share of Accumulated loss.

4. Drawings and interest on drawings (if any)

5. Share of loss on account of Revaluation of assets and liabilities.

6. His share of business loss.

Accounting Treatement

1. Calculation of new profit sharing ration and gaining ratio

2. Treatment of goodwill.

3. Revaluation a/c preparation with the adjustment in the respect of unrecorded assets/ liabilities.

4. Distribution of reserves and accumulated profits/loss.

5. Ascertainment of share of profits/loss till the date of retirement/death.

6. Adjustment of capital if required

7. Settlement of the Accounts due to Retired/Deceased partner.

New Profit Sharing Ratio & Gaining Ratio

New Profit Sharing Ratio It is the ratio in which the remaining partners will share further profits after retirement/death.

Gaining ratio It is the ratio in which the continuing partners have acquired the share from the outgoing partner Calulation of the two ratios Following situations may arise.

1. When no information about new ratio or gaining ratio is given in the question  In this case it is considered that the share of the retiring partner is acquired by the remaining partners in the old ratio. Then no need to calculate the new ratio/gaining ratio as it will be the same as before.

Example 1 :A

Band C are partners sharing profit and loss in the ratio of 3:2:1 then on retirement of the gaining ratio/new ratio will be

A2: 1

B3: 1

C3: 2

2. Gaining ratio is given which is different than the old ratio In this case


Please click the link below to download pdf file for CBSE Class 12 Retirement or Death of a Partner.


Click on the text For more study material for Accountancy please click here - Accountancy

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

Sample Papers for Class 10 Boards 2020

CBSE has recently released the Class 10 Sample Papers for Board exams which are to be held in March 2020. The sample papers have been for class 10 for all subjects along with the suggested marking scheme. CBSE releases these suggested papers every year so that the...

IBM to Set AI Curriculum for CBSE Class IX to XII

The Central Board of Secondary Education has tied up with IBM to develop a course of Artificial Intelligence in the CBSE curriculum. Now CBSE is going to introduce Artificial Intelligence as an elective subject for class 9 to 12th. The CBSE has taken this decision to...

CBSE class 10, 12 board exam important information

CBSE class 10, 12 board exam: important information to prevent problems for students : The Central Board of Secondary Education (CBSE) has issued an advisory for the students of class 10 and class 12 board. As per the notice, the registration of students appearing in...

Seven Motivational tips for every student

If you’re are a student or a learner and you doesn’t feel like study then this article is going to be very important for you, Reading constantly and Staying motivated as a student is one of the most challenging tasks and barriers to educational success. Education is...


Central Board of Secondary Education, CBSE is to conduct the 10th and 12th Board Examination 2020 from February 15, 2020. Due to University Admissions, CBSE has shifted Board Exams dates from 1 March to February 15 from 2019. This year too CBSE would be making changes...

CBSE will have more practicals

CBSE board has made a bigger announcement regarding 2020 board examinations for class 12. Board has decided that subjects like humanities, History, English and Hindi will also have practical exams like Chemistry, Biology, and Physics. As per, CBSE official's statement...

Studies Today