What is Memorandum Balance Sheet?

Memorandum Balance Sheet: A balance sheet as we know is a statement (i.e. prepared at a certain point of time) listing all assets and liabilities of the firm. It is prepared using the equation

Retirement of a Partner

Retirement of a partner implies a situation when a partner leaves a partnership firm for any reason and the remaining partners of the firm decide to continue with the business.

New Profit Sharing Ratio

A new profit sharing ratio (in case of retirement/death) is defined as a ratio in which the continuing partners agree to share their future profits and losses.