Deceased Partner’s Share

Correct answer: C. ₹2,00,000

The amount payable to a deceased partner is the total of all items credited or otherwise due to the partner, such as capital, goodwill, reserves and profit. Since this total is given as ₹2,00,000, the correct answer is ₹2,00,000. Amounts such as ₹1,90,000 or ₹2,10,000 would require an additional deduction or adjustment, which is not given here. Exam tip: Add all credits and subtract any applicable deductions before determining the final amount payable to a deceased partner.

Correct answer: A. Capital Account

The Capital Account shows the deceased partner’s basic capital balance and serves as the starting point for determining the amount due. Further adjustments are then made for the Current Account, goodwill, revaluation, and profit or loss up to the date of death. Sales, Purchase, and Cash Accounts are not the primary basis for this calculation. Exam tip: Remember that the final amount due includes the capital balance plus all applicable adjustments.

Correct answer: A. Deceased partner’s share of goodwill

A deceased partner is entitled to his or her share of the firm’s goodwill, so this amount is credited to the deceased partner’s Capital Account or Executor’s Account. Profit is also calculated only up to the date of death; future profit or the entire profit of the next year is not added. Exam tip: Remember goodwill, accumulated profits, and profit up to the date of death as key settlement items.

Correct answer: B. Deceased partner’s capital account

The deceased partner earns a right to the share of profit up to the date of death, so this amount is credited to the deceased partner’s capital account. It is subsequently payable to the deceased partner’s legal representative or executor. It is not credited to the surviving partners’ accounts. Exam tip: Always calculate profit up to the date of death separately from profit earned after that date.

Correct answer: A. Yes, the full ₹50,000

The positive balance of the deceased partner’s Capital Account is included in the amount payable to the legal representatives. Therefore, the full ₹50,000 will be included, although the final amount due may also include or adjust items such as profit, goodwill, reserves, drawings, or liabilities. Exam tip: the capital balance is a major component of the claim, not necessarily the entire final amount payable.

Correct answer: A. Credited to the capital account

A reserve fund represents accumulated profits. On a partner’s death, the deceased partner is entitled to their share of this reserve, so it is credited to the deceased partner’s capital account. Debiting the account would be the opposite treatment. Exam tip: Reserves and accumulated profits are generally credited to the partners’ capital accounts in their profit-sharing ratio.

Correct answer: A. Executor’s Loan Account

The amount due to a deceased partner is transferred to the deceased partner’s executor. If it is not paid immediately, it may be retained in the Executor’s Loan Account. Sales, Stock and Purchases Accounts record trading-related transactions and are therefore inappropriate for this amount. Exam tip: On a partner’s death, remember that the amount payable is settled through the executor’s account.

Correct answer: B. ₹70,000

The amount payable to a deceased partner includes the partner’s capital and share of goodwill. Therefore, total amount = ₹60,000 + ₹10,000 = ₹70,000. Since no other adjustment is given, option B is correct. In exams, identify capital, goodwill and any other adjustments separately before calculating the final amount.

Correct answer: A. Credited to the deceased partner’s Capital Account

Accumulated profits represent undistributed past profits. On the date of death, the deceased partner’s share, calculated according to the profit-sharing ratio, is credited to the deceased partner’s Capital Account, thereby increasing the amount payable to the partner’s estate. It is not deducted. Exam tip: Accumulated profits are credited to the partners’ Capital Accounts in their profit-sharing ratio.

Correct answer: B. ₹70,000

Remaining payable amount = total amount payable − amount already paid = ₹90,000 − ₹20,000 = ₹70,000. Therefore, option B is correct. ₹80,000 is incorrect because subtracting ₹20,000 from ₹90,000 leaves ₹70,000. In such questions, subtract the amount already paid from the total amount due.

Correct answer: A. It is added to the deceased partner’s Capital Account

Revaluation profit arising up to the date of death is distributed among all partners, including the deceased partner, in the old profit-sharing ratio. Therefore, the deceased partner’s share is credited to the deceased partner’s Capital Account and included in the amount payable to the legal representative. Deducting it is incorrect because a revaluation profit increases the partner’s capital. Exam tip: Always adjust the deceased partner’s share of profit or loss up to the date of death.

Correct answer: A. Liability

The amount payable to the deceased partner’s legal representative, after considering the capital account, current account, goodwill and profit or loss adjustments, remains a liability of the firm until it is paid. It is not income, profit or an asset. Exam tip: an unpaid amount due to a deceased partner is generally transferred to the deceased partner’s executor’s account and shown as a liability.

Correct answer: A. ₹85,000

The deceased partner’s capital account is credited with both the capital balance and the partner’s share of the reserve fund. Therefore, the total is ₹80,000 + ₹5,000 = ₹85,000. ₹75,000 results from subtraction, so it is incorrect. Exam tip: add all items credited to the deceased partner’s account and subtract items such as losses or drawings when calculating the amount due.

Correct answer: A. कानूनी प्रतिनिधि (Legal representative)

After adjusting the deceased partner’s capital, share of profit and other amounts due, the final amount is payable to the deceased partner’s legal representative or executor. Customers, suppliers and the bank have no claim over this personal amount. Exam tip: remember that the deceased partner’s dues are transferred to the account of the legal representative.

Correct answer: C. ₹90,000

Drawings are deducted from the amount due to the partner. Therefore, net amount payable = ₹1,00,000 − ₹10,000 = ₹90,000, so option C is correct. The ₹95,000 option results from deducting an incorrect amount. In an exam, remember that drawings reduce the amount payable to the partner.

Correct answer: B. ₹73,000

The capital and the deceased partner’s share of profit are added: ₹70,000 + ₹3,000 = ₹73,000. Therefore, option B is correct. In such questions, remember that a profit share increases the amount payable to the partner; it is not deducted from the capital.

Correct answer: A. To provide fair compensation for the partner’s contribution to the business

Goodwill represents the value of a firm’s reputation, customer relationships and profit-earning capacity. Since the deceased partner contributed to building this goodwill, its value is included in the partner’s share so that the partner’s legal representatives receive fair compensation. It is not included to reduce tax, increase sales or lower daily expenses. Exam tip: In retirement or death adjustments, goodwill is generally related to compensation for the partner’s contribution.

Correct answer: B. ₹100000

Balance payable = Total amount payable − Amount already paid = ₹110000 − ₹10000 = ₹100000. Therefore, option B is correct. Choosing ₹110000 ignores the amount already paid. In such questions, subtract the payment made from the total amount due to find the remaining balance.

Correct answer: A. Liability

The deceased partner’s capital, profit adjustments and other amounts due must be paid to the partner’s legal representative or executor. Therefore, the amount is a liability of the firm and is generally credited to the executor’s account. It is not an asset because the firm has to pay this amount rather than receive it. Exam tip: An amount payable by the firm to a partner or executor is treated as a liability.

Correct answer: C. ₹1,00,000

The amount payable to the deceased partner’s account is found by adding the capital balance and the partner’s share of goodwill. Thus, ₹88,000 + ₹12,000 = ₹1,00,000. ₹90,000 results from an incorrect addition. In the examination, include both the capital balance and the goodwill share before selecting the answer.

Correct answer: A. Executor’s Loan Account

When the amount due to a deceased partner is not paid immediately, it is transferred to the Executor’s Loan Account. This account records the amount as a liability payable to the deceased partner’s executor. Purchase, Sales and Building Accounts are unrelated to this adjustment. Exam tip: Remember that an unpaid amount due on a partner’s death goes to the Executor’s Loan Account.

Correct answer: B. ₹1,00,000

The amount payable from these two items is the balance in the Capital Account plus the goodwill attributable to the deceased partner: ₹90,000 + ₹10,000 = ₹1,00,000. Therefore, option B is correct. Options A and C result from incorrect addition. In an examination, remember that this calculation includes only the two stated items; profit, reserves, and other adjustments are excluded.

Correct answer: A. Because he is entitled to the profit earned up to the date of death

The profit earned by the firm up to the date of death belongs partly to the deceased partner for the period in which he was a partner. Therefore, his share is credited to his Capital or Current Account and forms part of the amount payable to his legal representative or executor. Bank requirements, customer demands, and payment of the entire profit as tax are unrelated reasons. Exam tip: Calculate profit up to the date of death using the time-ratio or the method specified in the question, then credit the deceased partner’s share.

Correct answer: B. ₹55000

Accumulated loss is debited to the partner’s account, so it reduces the amount payable. Net amount = ₹60000 − ₹5000 = ₹55000. Exam tip: add accumulated profits, but deduct accumulated losses from the deceased partner’s share.

Correct answer: A. Debited to the Capital Account

A revaluation loss is debited to the partner’s Capital Account because it reduces the net assets of the business and the partner’s capital claim. Thus, the deceased partner’s share of the loss is deducted from the partner’s Capital Account. In contrast, a revaluation profit is credited to the Capital Account. Exam tip: In the Revaluation Account, profit is credited and loss is debited; the corresponding effect is given to the partners’ Capital Accounts.