If the deceased partner’s share of profit earned up to the date of death is credited to his capital account, what will happen to the capital account balance?

Correct answer: It will increase

The deceased partner’s share of profit up to the date of death is credited to his account. A credit entry for this profit increases the balance of his capital account, so option A is correct. Option D may apply when the amount is credited to the current account instead of the capital account, as is generally done under the fixed capital method. Exam tip: first identify the account to which the profit share is credited.