Question

Profit/Loss on Revaluation of Assets & Liabilities on the retirement of a partner is shared by the partners in their ________.

• A. Capital ratio
• B. New profit sharing ratio
• C. Old profit sharing ratio
• D. Gaining ratio

Answer 1

The correct option is C Old profit sharing ratio

At the time of retirement or death of a partner, there may be some assets and liabilities which are not recorded in books at their current values.

The Revaluation profit or loss is transferred to the capital account of all partners including retiring or deceased partners in their old profit sharing ratio.