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What type of item is the deceased partner’s share of profit earned up to the date of death?

Answer and explanation

Correct answer: Liability of the firm

The deceased partner’s share of profit up to the date of death is credited to the partner’s capital account or Profit and Loss Adjustment Account and is ultimately payable to the deceased partner’s executor. Therefore, it is a liability of the firm, not its income or asset. Exam tip: any amount payable to the deceased partner or the executor is treated as a liability.

Related tags

Deceased PartnerShare Of ProfitPartnership AccountsLiabilityExecutor AccountDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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