If a partner dies after completing 9 months of the accounting year, what fraction of the annual profit will be considered for calculating the partner’s share of profit up to the date of death?

Correct answer: 9/12

An accounting year is taken as 12 months. Since the partner died after 9 months, the profit up to the date of death is calculated on a time basis as 9/12 of the annual profit, or three-fourths. The fraction 12/12 represents the entire year and is therefore incorrect. Exam tip: divide the months completed up to death by 12 and multiply by the annual profit.