Accountancy Part AReconstitution of Partnership Firm: Retirement and Death

Executor account is prepared on...........

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Death of a partner

When a partner dies, the amount due to him is paid to his legal representatives, called his executors. So his capital account balance is transferred to the Executor’s Account, and payment is made through it. A retiring partner is paid himself, so no executor’s account arises on retirement, admission or a change in profit sharing ratio.

NCERT (2026-27 edition):
Disposal of Amount Due to Retiring Partner – “… It may noted that the accounting treatment for disposal of amount due to retiring partner and deceased partner is similar with a difference that in case of death of a partner, the amount credited to him/her is transferred to his Executors’ Account and the payment has to be made to him/her. This shall be taken up later in this chapter.”