Which statement is correct regarding a deceased partner’s share of profit in a partnership firm?

Correct answer: His proportionate share of profit earned up to the date of death is adjusted in his capital or current account

A deceased partner is entitled to a proportionate share of the firm’s profit only up to the date of death, and this amount is credited to the partner’s capital or current account before being settled with the legal representatives. Option B is incorrect because, when death occurs during the year, the profit up to that date may be estimated without waiting for year-end. Exam tip: always divide the accounting period into the period up to death and the period after death.