Arrange the following steps in the order of the accounting treatment in case of death of a partner.

A. Adjustment of capital account of the existing partner.

B. Transfer of share of goodwill to deceased partner's capital account.

C. Transfer of amount from deceased partner's capital account to executor's account.

D. Calculation of New Profit Ratio and Sacrificing Ratio.

Choose the correct answer from the options given below:

D, B, A, C

Correct answer: Option (2) → D, B, A, C

Concept: On a partner’s death, the new/gaining ratio is settled first, goodwill and reserves are credited to the deceased, and the final balance is transferred to the executor’s account – per Reconstitution of a Partnership Firm – Retirement/Death of a Partner.

Correct order: (D) Calculate New Profit Ratio and Sacrificing/Gaining Ratio → (B) Transfer share of goodwill to the deceased partner’s capital account → (A) Adjust the capital accounts of the existing partners → (C) Transfer the amount from the deceased partner’s capital account to the Executor’s Account. Hence D, B, A, C.