Question

at the time of death of a partner;
which account is prepare
Representative A/C
(b) Deceased Part
Profit and loss
(d) All of these

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Answer 1

Answer:

Explanation:

Adjustment of Partners Capital and Death of a Partner

At the time of the death of a partner, we credit the following amounts in the Deceased Partner’s Capital Account:

(i). Reserves or Undistributed profits

(ii). Goodwill

(iii). Profit on Revaluation of assets and liabilities.

(iv). Any loan is given by the partner

(v). The share of Joint Life Policy

(v). Share in subsequent Profits

(vi). Interest on Capital

However, we need to debit the following amounts:

(i). Drawings by the deceased partner

(ii). Interest on Drawings

(iii). Loss of Revaluation of assets and liabilities.

(iv). Share in subsequent Losses.

The legal representative of a deceased partner has a right to subsequent profits. He also has a right to choose whether he wants the share in the profit or the interest at the rate of 6 percent per annum.