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Why is the deceased partner’s share of profit earned up to the date of death credited to the deceased partner’s account?

Answer and explanation

Correct answer: 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.

Related tags

Deceased PartnerProfit Up To DeathPartnership ReconstitutionRetirement Or DeathPartner Capital AccountDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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