Match List - I with List - II.

Choose the correct answer from below.

(A)-(III), (B)-(IV), (C)-(II), (D)-(I)

The correct answer is Option 4 - (A)-(III), (B)-(IV), (C)-(II), (D)-(I).

* Deceased Partner's Capital A/c-Executor's Account. Once the revaluation adjustments are made, the next step is to calculate the amount payable to the executor of the deceased partner. This involves determining the deceased partner's share in the firm. After calculating the amount payable to the executor, the actual payment is made to settle the deceased partner's share. This payment is typically made to the executor of the deceased partner's estate.

* General Reserve- Distributed in profit sharing ratio. Sometimes, the Balance Sheet of a firm may show accumulated profits in the form of general reserve and/on accumulated losses in the form of profit and loss account debit balance. The retiring/deceased partner is entitled to his/her share in the accumulated profits and is also liable to share the accumulated losses, if any. These accumulated profits or losses belong to all the partners and should be transferred to the capital accounts of all partners in their old profit sharing ratio.

* Retiring Partner's Capital A/c- Partner's Loan A/c. The outgoing partner’s account is settled as per the terms of partnership deed i.e., in lumpsum immediately or in various instalments with or without interest as agreed or partly in cash immediately and partly in instalment at the agreed intervals. In the absence of any agreement, Section 37 of the Indian Partnership Act, 1932 is applicable, which states that the outgoing partner has an option to receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money (i.e., based on capital ratio). Hence, the total amount due to the retiring partner which is ascertained after all adjustments have been made is to be paid immediately to the retiring partner. In case the firm is not in a position to make the payment immediately, the amount due is transferred to the retiring Partner’s Loan Account, and as and when the amount is paid it is debited to his account.

* Existing Goodwill- Written off in profit sharing ratio. Existing goodwill is written off by debiting old partners capital account in their old ratio and crediting goodwill.