Deceased Partner’s Share

Correct answer: C. ₹1,00,000

The accumulated loss is deducted from the amount payable to the deceased partner. Therefore, net amount payable = ₹1,12,000 − ₹12,000 = ₹1,00,000. The ₹95,000 option results from an incorrect subtraction. Exam tip: a loss attributable to the partner reduces the amount payable to that partner.

Correct answer: C. ₹110,000

The deceased partner’s executor’s claim includes the partner’s capital plus their share of the revaluation profit. Therefore, total claim = ₹96,000 + ₹14,000 = ₹1,10,000. Hence, option C is correct. In the examination, remember that a revaluation profit is credited to the partner’s capital account and added to the claim, not deducted.

Correct answer: B. Reduces the amount due

Accumulated loss represents a reduction in the firm’s accumulated profits. The deceased partner’s share of this loss is debited to their Capital Account or Current Account, thereby reducing the amount payable to them. ‘No effect’ is incorrect because the loss must be adjusted in the partners’ accounts. Exam tip: accumulated profits are credited, whereas accumulated losses are debited to the partners’ accounts.

Correct answer: B. ₹90,000

Net claim of the deceased partner = capital balance + share of goodwill − drawings. Therefore, ₹82,000 + ₹10,000 − ₹2,000 = ₹90,000. Drawings reduce the amount payable, whereas the partner’s share of goodwill increases it. In an examination, also include any stated profit share, revaluation gain, or other adjustment in the claim.

Correct answer: A. Profit or loss earned and other due adjustments up to the date of death are determined

The date of death acts as the cut-off date for partnership accounts. The deceased partner’s account includes the profit or loss up to that date, goodwill, accumulated profits or losses, and other relevant adjustments. Therefore, taking the profit for the entire year is incorrect because the post-death profit belongs to the continuing partners. Exam tip: While calculating the deceased partner’s share, apportion profit or loss up to the date of death using time or sales as the agreed basis.

Correct answer: C. ₹1,25,000

The revaluation loss is deducted from the total claim: ₹1,32,000 − ₹7,000 = ₹1,25,000. Therefore, the net amount payable to the deceased partner’s successor is ₹1,25,000. Exam tip: deduct a revaluation loss from the claim; add a revaluation profit instead.

Correct answer: C. ₹90,000

The deceased partner’s claim includes the partner’s capital and the share of the reserve fund credited to the partner. Therefore, total claim = ₹72,000 + ₹18,000 = ₹90,000. The other amounts result from an incorrect addition. Exam tip: Include all adjustments due up to the date of death before determining the final claim.

Correct answer: A. Creditor of the firm

After the partner’s death, the legal representative does not automatically become a partner. Until the amount payable—such as capital, share of profit, or other dues—is settled, the representative is treated as a creditor of the firm. Therefore, option A is correct; becoming a new partner would require the consent of the concerned parties and a fresh agreement. Exam tip: after death, the representative’s primary relationship is for recovery of the claim, not automatic continuation of the partnership.

Correct answer: C. ₹1,50,000

Balance payable = Total claim − Advance paid = ₹1,75,000 − ₹25,000 = ₹1,50,000. Therefore, option C is correct. ₹1,45,000 would result from deducting ₹30,000 instead of ₹25,000. In such questions, subtract all advance payments from the total amount due to the deceased partner’s executor.

Correct answer: A. It is the partner’s right in the profit earned up to the date of death

Undistributed profit represents profit earned by the firm but not yet distributed among the partners. The deceased partner is entitled to their proportionate share of this profit earned up to the date of death, so it is credited to the partner’s capital or current account and included in the amount payable to the estate. It is neither a Profit and Loss expense nor automatically cash. Exam tip: Credit the deceased partner’s account with their share of profit and debit it with their share of loss.

Correct answer: B. ₹1,20,000

The deceased partner’s net claim is calculated as capital + accumulated profits − drawings. Thus, ₹1,10,000 + ₹15,000 − ₹5,000 = ₹1,20,000. Accumulated profits increase the amount payable, whereas drawings reduce it. In the examination, add all credit items first and then subtract drawings and other deductions.

Correct answer: A. Future profits

The deceased partner’s share includes his or her proportionate amount of goodwill, reserve fund and revaluation profit. The partner may also receive a share of profit earned up to the date of death, but has no claim over profits earned after death. In exams, distinguish carefully between profit up to the date of death and future profits.

Correct answer: C. ₹1,20,000

Net claim = Total amount due − Drawings = ₹1,28,000 − ₹8,000 = ₹1,20,000. Drawings are deducted from the partner’s amount due, so the net claim is reduced by ₹8,000. In such questions, subtract drawings from the total amount payable.

Correct answer: A. Because the amount is not paid immediately

After adjusting the deceased partner’s capital, share of profit, goodwill and other relevant items, the amount due becomes a liability of the firm. If it is not paid immediately, it is transferred to the deceased partner’s executor’s loan account for settlement later, with interest if agreed. This transfer does not increase profit, reduce expenses or automatically extinguish the firm’s liability. Exam tip: An unpaid amount due to a deceased partner is transferred to the executor’s loan account.

Correct answer: C. ₹80,000

The deceased partner’s total claim includes the amount in the capital account plus the partner’s share of goodwill. Therefore, total claim = ₹67,000 + ₹13,000 = ₹80,000. The option ₹78,000 results from an incorrect addition. In an examination, also check whether profit, loss, loan, or any other adjustment is given before calculating the final claim.

Correct answer: A. On the basis of his entitlement in the partnership up to the date of death

Revaluation is carried out at the date of death, so the deceased partner’s share of the resulting profit or loss is adjusted in his Capital Account or Current Account. This entitlement is based on his partnership rights up to the date of death, not on profits earned after death. Exam tip: Revaluation profit or loss is distributed among the old partners in their old profit-sharing ratio.

Correct answer: C. ₹130000

Accumulated loss reduces the amount payable to the deceased partner. Therefore, revised claim = ₹145,000 − ₹15,000 = ₹130,000, making option C correct. Exam tip: when a loss is adjusted against a partner’s claim, subtract it from the original claim rather than adding it.

Correct answer: A. Accumulated profits

A reserve fund represents profits earned in earlier years and retained in the business. Therefore, the deceased partner is entitled to their share of the reserve in the profit-sharing ratio, and this amount is included in the partner’s claim. It is not an external liability, fixed asset, or expense. Exam tip: A general reserve is normally distributed among the old partners in their old profit-sharing ratio.

Correct answer: C. ₹1,00,000

The deceased partner’s total claim is calculated as capital plus the share of profit plus the share credited from the reserve fund. Therefore, ₹84,000 + ₹6,000 + ₹10,000 = ₹1,00,000. The reserve fund is credited to the partner’s account in the agreed profit-sharing ratio. In the examination, include goodwill or any other adjustment only when it is specifically given in the question.

Correct answer: A. Fair and equitable settlement

The objective is to settle the deceased partner’s actual entitlement fairly. Therefore, the partner’s capital and current accounts, accumulated profits or losses, revaluation adjustments, goodwill, and share of profit or loss up to the date of death are determined and adjusted appropriately. Conservatism is an accounting convention, but it is not the primary objective of this settlement. Exam tip: Remember to include adjustments such as goodwill and profit or loss up to the date of death.

Correct answer: C. ₹1,00,000

Balance claim = Total claim − Amount already paid = ₹1,60,000 − ₹60,000 = ₹1,00,000. Therefore, option C is correct. The ₹90,000 distractor results from subtracting ₹70,000 instead of ₹60,000. In such questions, subtract the amount already paid from the deceased partner’s total claim.

Correct answer: A. Interest accrued up to the date of death

Interest on capital accrued up to the date of death is credited to the deceased partner’s account because it is due for the period during which the partner was in the firm. Interest for the period after death, or interest recognised merely on receipt of cash or estimation, is not included. In an exam, identify the phrase “up to the date of death” as the key clue.

Correct answer: C. ₹1,10,000

The deceased partner’s account is credited with his capital, share of goodwill, and share of revaluation profit. Therefore, total claim = ₹93,000 + ₹9,000 + ₹8,000 = ₹1,10,000. Hence, option C is correct. Option B understates the total by ₹2,000, while option D overstates it by ₹2,000. Exam tip: Add all credit items due up to the date of death and deduct any debit items, such as losses or drawings, when they are given.

Correct answer: A. Because the partner has already withdrawn this amount

Drawings are amounts already withdrawn by the partner for personal use. Therefore, they reduce the balance payable to the deceased partner in the capital or current account. Drawings are not profits, assets, or reserves. Exam tip: deduct drawings when determining the partner’s final amount due from the firm.

Correct answer: B. ₹1,20,000

Net claim = Total claim − Revaluation loss − Drawings = ₹1,38,000 − ₹8,000 − ₹10,000 = ₹1,20,000. Both the revaluation loss and drawings reduce the amount payable to the deceased partner. In the examination, remember to deduct these items rather than add them to the claim.