Question

On the death of a partner, his capital account is credited with:

• A. Share of profit
• B. Share of goodwill
• C. Share of accumulated profits
• D. All of the above

Hint:

The deceased partner’s capital account is credited with his share of capital, profits, goodwill, and any loans owed by the firm.

Answer 1

The Correct Option is D

On the death of a partner, the following amounts are credited to the deceased partner’s capital account:
1. The balance of the capital account at the time of death.
2. His share of the accumulated profits or losses.
3. His share of goodwill, if applicable.
4. Any outstanding loan amount due from the firm to the deceased partner.
The journal entry for the death of a partner is:
To Deceased Partner’s Capital Account Balance of capital and share of profits