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If the amount due to the legal heir of a deceased partner is not paid immediately, to which account is it transferred?

Answer and explanation

Correct answer: Loan Account

When the amount due to a deceased partner’s legal heir is not paid immediately, it is transferred to the heir’s loan account. The amount continues to be a liability of the firm until it is paid. A capital account is incorrect because the deceased partner’s capital account is settled and closed at the time of death. Exam tip: Show unpaid dues to the legal representative in the Executor’s Loan Account.

Related tags

Partner RetirementPartner DeathLoan AccountLegal HeirReconstitutionPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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