Question:
Select the correct sequence of accounts prepared in case of death of a partner.
(A) Prepare the deceased partner's executor's account.
(B) Determine the gaining ratio and new profit sharing ratio among the remaining partners.
(C) Prepare the deceased partner's capital account.
(D) Prepare the Revaluation account, if required.
Choose the correct answer from the options given below:
Select the correct sequence of accounts prepared in case of death of a partner.
(A) Prepare the deceased partner's executor's account.
(B) Determine the gaining ratio and new profit sharing ratio among the remaining partners.
(C) Prepare the deceased partner's capital account.
(D) Prepare the Revaluation account, if required.
Choose the correct answer from the options given below:
(A) Prepare the deceased partner's executor's account.
(B) Determine the gaining ratio and new profit sharing ratio among the remaining partners.
(C) Prepare the deceased partner's capital account.
(D) Prepare the Revaluation account, if required.
Choose the correct answer from the options given below:
Show Hint
End with the executor, since the capital balance decides what is due to him.
Updated On: Oct 1, 2026
- (A), (B), (C), (D)
- (A), (B), (D), (C)
- (B), (C), (D), (A)
- (B), (D), (C), (A)
Show Solution
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The Correct Option is D
Solution and Explanation
Step 1: Understanding the Concept:
On the death of a partner, the firm must fix the new ratio, revalue assets and liabilities, settle the deceased partner's capital, and finally move the amount due to his executor.
Step 2: Step order in practice:
First find the gaining ratio and new ratio (B). Next prepare the Revaluation account to bring assets and liabilities to current value (D). Then prepare the deceased partner's capital account, which includes his share of goodwill, reserves and the revaluation result (C). Last, transfer the balance to the executor's account (A).
Step 3: Why B comes first:
The gaining ratio is needed to adjust goodwill. Goodwill is adjusted through the capital accounts, so the ratio must be known before them.
Step 4: Why D comes before C:
Profit or loss on revaluation is credited or debited to the deceased partner's capital account. So the Revaluation account must be ready before it.
Step 5: Why C comes before A:
The executor's account shows the final amount payable. That amount is the closing balance of the capital account, so C comes before A.
Step 6: Match with options:
The sequence is B, D, C, A. This is option (4). Option (3) puts the capital account before revaluation, and options (1) and (2) place the executor's account or the ratio at the wrong place.
Final Answer:
The correct sequence is (B), (D), (C), (A). \[ \boxed{\text{(B), (D), (C), (A) (Option 4)}} \]
On the death of a partner, the firm must fix the new ratio, revalue assets and liabilities, settle the deceased partner's capital, and finally move the amount due to his executor.
Step 2: Step order in practice:
First find the gaining ratio and new ratio (B). Next prepare the Revaluation account to bring assets and liabilities to current value (D). Then prepare the deceased partner's capital account, which includes his share of goodwill, reserves and the revaluation result (C). Last, transfer the balance to the executor's account (A).
Step 3: Why B comes first:
The gaining ratio is needed to adjust goodwill. Goodwill is adjusted through the capital accounts, so the ratio must be known before them.
Step 4: Why D comes before C:
Profit or loss on revaluation is credited or debited to the deceased partner's capital account. So the Revaluation account must be ready before it.
Step 5: Why C comes before A:
The executor's account shows the final amount payable. That amount is the closing balance of the capital account, so C comes before A.
Step 6: Match with options:
The sequence is B, D, C, A. This is option (4). Option (3) puts the capital account before revaluation, and options (1) and (2) place the executor's account or the ratio at the wrong place.
Final Answer:
The correct sequence is (B), (D), (C), (A). \[ \boxed{\text{(B), (D), (C), (A) (Option 4)}} \]
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