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Why is a deceased partner given a share of the profit earned up to the date of death?

Answer and explanation

Correct answer: Because he is entitled to the profit earned up to death according to his profit-sharing ratio

A deceased partner is entitled to the profit earned during the current accounting year up to the date of death, according to the agreed profit-sharing ratio. Therefore, the estimated share of that profit is credited to the deceased partner’s Capital or Current Account. It is not a claim on future profits, a bonus, or a loan. Exam tip: Profit is calculated only for the period from the beginning of the accounting year up to the date of death.

Related tags

Deceased Partner ShareRetirement And Death Of PartnerProfit Up To Date Of DeathPartnership AccountsReconstitution Of PartnershipDeceased Partner’s ShareDeceased Partner S ShareReconstitution Retirement Or Death Of A Partner

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