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What does proper accounting of a deceased partner’s share ensure?

Answer and explanation

Correct answer: Correct determination and settlement of the amount due to the legal heirs

Proper accounting includes adjustments for the deceased partner’s capital and current accounts, goodwill, revaluation profit or loss, accumulated profits, and the profit or loss up to the date of death. This ensures the correct determination and settlement of the amount payable to the deceased partner’s legal heirs. An automatic increase in sales, profit, or stock value is not a consequence of this accounting. Exam tip: focus on the accurate settlement of the deceased partner’s claim.

Related tags

AccountancyPartnershipReconstitutionDeceased Partner ShareLegal HeirsSettlementDeceased Partner’s ShareDeceased Partner S Share

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