Practicing Success
In case of the Death of a Partner, Profit till the death of deceased partner is debited to which account? |
Revaluation Account Profit and Loss Suspense Account Deceased Partner's Capital Account Deceased Partner's Current Account |
Profit and Loss Suspense Account |
Normally retirement of a partner takes place at the end of accounting period. But there can be a case where a partner decides to retire in the middle of the year. In such a case the claim shall include share of profit or loss, interest on capital, interest on drawings if any, from the date of last balance sheet to the date of retirement. Here, the main problem relates to the calculation of profit for the intervening period, i.e., the period from the date of last balance sheet and the date of retirement.The journal entry will be recorded as follows: |