What is the sequence of making account by a partnership firm at the time of death of a partner?
A) Capital A/c
B) Balance sheet
C) Executor A/c
D) Revaluation A/c
Answer & explanation
Correct answer: option 4
The correct answer is option 4- DACB.
The correct sequence of making accounts by a partnership firm at the time of the death of a partner is:
D) Revaluation A/c - This account is prepared to adjust the values of assets and liabilities to their current values at the time of a partner's death.
A) Capital A/c - The deceased partner's capital account needs to be settled.
C) Executor A/c - This account is used to transfer the deceased partner's share of profits and liabilities to their executor.
B) Balance sheet- Finally, a new balance sheet is prepared to reflect the current financial position of the partnership after adjustments.