Practicing Success
Identify the basis on which share of Profit or Loss of deceased partner is calculated from the date of last balance sheet to the date of death of that partner. |
Time Basis Sales Basis Either Time Basis or Sales Basis Product basis |
Either Time Basis or Sales Basis |
The correct answer is Option is (3) → Either Time Basis or Sales Basis Profit can be calculated on any of the above basis. The base can be mentioned in the partnership deed or it will be mutually decided by the partners. Closing the books and preparing the final accounts for the period following the death of a partner can be a complex and time-consuming process. To simplify this procedure, the deceased partner's share of the profit can be determined using alternative methods. |