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What effect will the deceased partner’s share of accumulated loss have on the partner’s capital account?

Answer and explanation

Correct answer: It will be debited

Accumulated loss represents a debit balance of the Profit and Loss Account. The deceased partner’s share of this loss is debited to the partners’ capital accounts in their profit-sharing ratio, thereby reducing the deceased partner’s capital. In contrast, accumulated profits are credited. Exam tip: remember accumulated profit = credit and accumulated loss = debit.

Related tags

AccountancyPartnershipReconstitutionDeceased PartnerCapital AccountAccumulated LossesDeceased Partner’s ShareDeceased Partner S Share

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