Skip to main content
Super TutorResources
Chapter 3 of 10
QuestionsNotesFlashcardsSummaryFormulasQuizConceptsSyllabusPlan
Revision Notes

Reconstitution of Partnership : Admission of a Partner

ICSE · Class 12 · Accountancy

Quick revision notes for Reconstitution of Partnership : Admission of a Partner — ICSE Class 12 Accountancy. Key concepts, formulas, and definitions for last-minute revision.

68 questions38 flashcards5 concepts

Interactive on Super Tutor

Studying Reconstitution of Partnership : Admission of a Partner? Get the full interactive chapter.

Quizzes, flashcards, AI doubt-solver and a step-by-step study plan — built for revision notes and more.

Try Super Tutor — Free

1,000+ Class 12 students started this chapter today

Key Topics to Revise

1

1. Meaning and Occasions of Reconstitution

  • Partnership is created by agreement.
  • Any change in the partnership agreement, if the firm continues, amounts to reconstitution.
  • On admission of a new partner, the existing agreement ends and a new agreement comes into effect.
2

2. New Profit Sharing Ratio and Sacrificing Ratio

  • New profit sharing ratio is the ratio in which all partners, including the incoming partner, share future profits and losses.
  • Sacrificing ratio is the ratio in which old partners sacrifice their share of profit in favour of the incoming partner.
  • New share = Old share - Sacrifice share.
3

3. Treatment of Goodwill and Hidden Goodwill

  • Premium for goodwill is the payment made by the incoming partner for the right to share future profits built on the old partners' past efforts.
  • If premium is paid privately outside the business, no journal entry is made in the books of the firm.
  • If premium is brought in cash and retained in the business, it is credited to Premium for Goodwill A/c and distributed among sacrificing partners in their sacrificing ratio.
4

4. Accumulated Profits, Losses, and Specific Funds

  • Accumulated profits and losses belong to old partners because they arose before admission.
  • General Reserve, Reserve Fund, Profit and Loss Account balance, and Contingency Reserve are transferred to old partners' capital/current accounts in their old ratio.
  • Entries for transferring accumulated profits and losses should be passed even if the question is silent.

Get complete notes with diagrams and examples

Full Notes

Key Concepts

A change in the partnership agreementA person admitted into the firmThe ratio in which all partnersThe ratio in which old partnersThe amount paid by the new

Frequently Asked Questions

What are the important topics in Reconstitution of Partnership : Admission of a Partner for ICSE Class 12 Accountancy?
Key topics in Reconstitution of Partnership : Admission of a Partner include Overview of Admission of a Partner: Key Concepts, Admission of a Partner — Complete Concept Map, Chapter Overview: Admission of a Partner. These are the concepts ICSE Class 12 examiners draw on most — study them first, then practise related questions.
How to score full marks in Reconstitution of Partnership : Admission of a Partner — ICSE Class 12 Accountancy?
Understand the core concepts first, then work through the 68 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

More resources for Reconstitution of Partnership : Admission of a Partner

All 10 chapters — ICSE Class 12 Accountancy Revision Notes

For serious students

Get the full Reconstitution of Partnership : Admission of a Partner chapter — for free.

Quizzes, flashcards, AI doubt-solver and a step-by-step study plan for ICSE Class 12 Accountancy.

Try Super Tutor Free
Try the full chapter — Free