Question

The Profit or Loss from revaluation on the retirement of a partner is shared by ______.

Options

• The remaining partners

• All the partners

• Only retiring partner

• Bank

Answer 1

The Profit or Loss from revaluation on the retirement of a partner is shared by all the partners.

Explanation:

When a partner retires, the assets and liabilities of the firm are revalued to show their current market value. Since this profit or loss has accrued up to the date of retirement, it belongs to the entire firm as it existed before the retirement. Therefore, it is shared by all the partners (including the retiring partner) in their old profit-sharing ratio.