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If the amount due to a deceased partner is paid immediately, which of the following accounts does not need to be opened?

Answer and explanation

Correct answer: Loan Account

The deceased partner’s capital, profit or loss adjustments, and other dues are settled through the partner’s capital account. When the final amount due is paid immediately, no loan account is required for a later settlement. A bank or cash account may be used depending on the mode of payment. Exam tip: No loan account is opened for immediate payment; if payment is deferred, the amount is transferred to the deceased partner’s loan account.

Related tags

AccountancyPartnershipReconstitutionDeceased PartnerLoan AccountCapital AccountDeceased Partner’s ShareDeceased Partner S Share

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