What will be the sequence of events in case of death of a partner in a partnership firm?
(A) Prepare Deceased Partner's Executor's A/c
(B) Prepare Deceased Partner's Capital A/c
(C) Calculate share of Profit upto date of death for the deceased partner
(D) Revaluation of assets and liabilities
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
Correct answer: Option (1) → (D), (C), (B), (A)
Concept: Sequence of adjustments on the death of a partner, per Reconstitution of a Partnership Firm – Retirement/Death of a Partner.
(D) First revalue assets and liabilities (Revaluation A/c) → (C) calculate the deceased partner’s share of profit up to the date of death → (B) prepare the Deceased Partner’s Capital A/c to ascertain the amount due → (A) transfer that amount to the Deceased Partner’s Executor’s A/c. Hence D, C, B, A.