Riya, Tiya, Priya were partners in a firm sharing profit in ratio of 4: 3: 2. The profit of the firm for the year ending March 31, 2020 was ₹3,60,000. Tiya died on June 30,2020. Which account will be debited and by how much on account of share of profit upto the date of death?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Profit and Loss Suspense Account, ₹30,000
Tiya's share of profit from April 1 to June 30, 2020 is based on last year's profit, and the firm records it through the Profit and Loss Suspense Account:
Tiya's share of profit = ₹3,60,000 × 3/12 × 3/9
Tiya's share of profit = ₹30,000
Entry: Profit and Loss Suspense A/c Dr. ₹30,000, To Tiya's Capital A/c ₹30,000
NCERT (2026-27 edition):
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