Q.On retirement of a partner from a partnership firm, accumulated profits and losses are distributed to the partners on the basis of :

Accumulated profits/reserves/losses are distributed in the old profit-sharing ratio on a partner's retirement.

In the TN HSC Class-12 Accountancy syllabus (Retirement and Death of a Partner), any accumulated profits, reserves (e.g. general reserve) and accumulated losses appearing in the balance sheet were earned or incurred before the retirement, when all partners (including the outgoing one) shared profits in the old ratio.

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