Which of the following is a common mistake while calculating the deceased partner’s share of profit?

Correct answer: Including profit for the period after death

The deceased partner’s share of profit is calculated only for the period from the date of the last accounts up to the date of death. Therefore, including profit for the period after death is incorrect. Applying a time ratio to the previous year’s profit or estimating profit on the basis of average profit up to the date of death are generally accepted methods. Exam tip: always stop the profit calculation at the date of death.