Q.Distinguish between retirement of a partner and death of a partner.

Retirement and death both end a partner's membership of the firm, but one is a matter of choice and the other is not.

Retirement is the voluntary withdrawal of a partner, with consent or as per the deed, usually at a point the partner chooses. Death is the involuntary, automatic cessation of membership on the partner's death, which can occur at any time during the year, needs no notice, and additionally requires the deceased partner's share of the current year's profit up to the date of death to be estimated and credited to the executor.

Retirement and death of a partner are both events that reconstitute a firm, and most of the accounting treatment (new ratio, goodwill, revaluation, adjustment of reserves, settlement of dues) is common to both. However, they differ in several important respects:

Because death can fall in the middle of an accounting year, the firm cannot simply wait for the next Balance Sheet to work out the deceased partner's dues for that year — this is the one genuinely distinct computation death requires that retirement (typically settled at year-end) usually does not.

Students often say the two are "basically the same" and only mention the executor difference. Always also mention the timing difference (death can fall mid-year) and the resulting need to estimate the deceased partner's share of profit up to the date of death — a step retirement (usually at year-end) does not require.