Q.Death is a compulsory ______.

The correct option is Retirement. Death of a partner is treated as a compulsory retirement — it ends that partner's membership of the firm involuntarily, and the accounting treatment follows the same steps as an ordinary retirement.

Explanation

• On the death of a partner the firm has to close his account and pay the amount due to his executor / legal representative. …

Death of a partner amounts to a compulsory retirement from the firm.

The question distinguishes the modes by which a partner ceases to be part of the firm:

• Retirement — a partner leaving the firm. Normally it is voluntary, but on death the partner leaves compulsorily, so death is treated as a compulsory retirement.
• Admission — a new partner joining (the opposite of leaving).
• Dissolution / Winding-up — closing down the entire firm, not just one partner exiting. …