Class 12 Accountancy Index Terms Part I Chapter 4: Reconstitution of a Partnership Firm - Retirement/Death of a Partner.

Learn CBSE Accountancy Index Terms for Class 12, Part 1, Chapter 4, Including Definitions and Meanings

1. Retirement of a Partner – The retirement of a partner is the official termination of an accounting firm’s relationship with its most senior partner. Retirement of a partner is the retirement of an accounting partner in a partnership firm.

The retirement of a partner is a change in the status of a partner. The term refers to the move from being in partnership or joint ownership to being independent operators. It may happen when a limited partner leaves or when there is a need to remove a partner who has breached their duties, or who is no longer interested in continuing with the partnership.

The retirement of a partner is the final act of dissolution of a partnership by mutual consent. Factors that should be considered before deciding to retire include established and expected standard of living; differences in age and health issues; experience with the firm and its operations.

2. Executor’s of a Deceased Partner – The executor of a deceased partner is a person who has been named as executor, administrator, or trustee of the estate of a deceased partner, and the judicial powers to administer the business or property are vested to them.

The executors of a deceased partner are the people who take over and run an accounting firm. They will be working in the partnership after the death, but before one can start to collect the deceased partner’s shares.

The executor of a deceased partner refers to an individual who takes the place of a partner in the firm and is responsible for fulfilling all the remaining obligations of the deceased partner.

3. Death of a Partner – Death is an event that happens to single-partner firms and to small businesses. When a business owner dies, the business is legally dissolved. The death of a partner in accounting means more than just the passing of an individual. It represents the loss of an entire professional team that’s professionally trained and skilled at serving its business.

The death of a partner is a liability to the firm that must be carried out at the time when the company’s accounts are prepared. A partner may die while still in service or while still in outside employment. The balance due will accrue over the remaining years of the partnership to be deducted from future payments.

The death of a partner occurs when one of the partners dies and leaves their share in the business to the others. A partner’s death or the decent and survivor election is a process that occurs if a partnership elects to forgo the right to participate in profits and losses. Under the original form of partnership, all members of the partnership are required to be present whenever their business or activities are discussed or action taken by any partnership members.

4. Executor’s Account – In accounting, an executor’s account is a record of any type of account that an executor must balance, if they have to distribute the assets of a deceased person. This can include such things as life insurance policies and retirement accounts.

An executor’s account is a custodial account that shows the details of the estate (control) agreement. The executor must maintain this account, as it has to show the distribution of assets according to the will or other legal documents that established the arrangement. It may be maintained by the person charged with administering the estate, who will also receive any income from it in their capacity as executor.

An executor’s account is the account of a person who is appointed as an executor of the deceased person. The executor’s account transaction is a request to debit or credit an account which is the account of a deceased person authorised to be credited or debited by the executor to pay debts and expenses of the estate. The executor’s account should contain all transactions involving accounts belonging to the deceased person, including death benefit payment refund.

The executor’s account is the account belonging to the beneficiary or beneficiary’s estate. The executor of an estate keeps track of receipts from the sale of assets, including personal property and real estate, as well as expenditures related to the liquidation of the estate.

4. Hidden Goodwill – Hidden goodwill represents the costs of developing, marketing, and integrating a new product into the market. It is created when there are adjustments to purchase price, inventory price, or/and current period accounts. The value of hidden goodwill can rise or fall over time if product development proves successful or not.

Hidden goodwill refers to the difference between the value of a company’s assets and liabilities, on the one hand, and the market value of its stock, on the other. Hidden goodwill can range from zero to a significant level. It is determined by subtracting its value from that of its stock, and dividing it by its denominator. In other words, hidden goodwill = (market value of outstanding shares) – (value of outstanding assets).

Hidden goodwill represents the value of intangible assets that can not be identified with a formula. These assets include trademarks, copyrights, and patents.

Hidden goodwill is the legal risk of a company paying creditors with borrowed money. The value of the company’s assets is insufficient to cover all its liabilities, and so it pays off some of these as loans. If it had made only profits, one could expect it to hold back on paying its debts rather than borrowing more.

We hope that the offered Accountancy Index Terms for Class 12 with respect to Part 1 Chapter 4: Reconstitution of a Partnership Firm – Retirement/Death of a Partner will help you.

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