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What is the effect of adding the deceased partner’s share of profit earned up to the date of death to his account?

Answer and explanation

Correct answer: The amount payable to the legal representative increases

The deceased partner’s share of profit up to the date of death is credited to his capital or current account. This increases the credit balance payable to his legal representative. Therefore, option A is correct; the adjustment increases, rather than decreases, the firm’s liability. Exam tip: Credit the deceased partner’s account with the profit share earned up to the date of death.

Related tags

Deceased PartnerShare Of ProfitLegal RepresentativePartner RetirementAccounting AdjustmentDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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