Practicing Success
On the death of a partner, his share in the profits of the firm till the death is transferred to: |
Credit of P & L A/c Debit of Deceased partner's Capital account Credit of P & L suspense A/c Debit of P & L suspense A/c |
Debit of P & L suspense A/c |
The correct answer is option 4- Debit of P & L suspense A/c. For being deceased partner’s share of profits for the intervening period to books of account, the following journal entry is recorded. Later Profit and Loss Suspense account is closed by transferring the account to Gaining Partners' Capital Account in their gaining ratio. |