Select the correct sequence of accounts prepared in case of death of…

Select the correct sequence of accounts prepared in case of death of a partner.

(A) Prepare the deceased partner's executor's account.

(B) Determine the gaining ratio and new profit sharing ratio among the remaining partners.

(D) Prepare the Revaluation account, if required.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (B), (D), (C), (A)

On the death of a partner, the amount due to him is worked out step by step, and each step needs the result of the one before it.

(B) Determine the gaining ratio and new profit sharing ratio among the remaining partners — first, because goodwill and the other adjustments between the continuing partners are made in the gaining ratio.

(D) Prepare the Revaluation account, if required — next, since the deceased partner’s share of the gain or loss on revaluation has to reach his capital account.

(C) Prepare the deceased partner’s capital account — after every adjustment is made, its balance is the amount due to him.

(A) Prepare the deceased partner’s executor’s account — last, because the amount due is transferred to his executors only once it is known.

NCERT (2026-27 edition):
Ascertaining the Amount Due to Retiring/Deceased Partner – “… Thus, similar to admission, the various accounting aspects involved on retirement or death of a partner are as follows: 1. Ascertainment of new profit sharing ratio and gaining ratio; 2. Treatment of goodwill; 3. Revaluation of assets and liabilities; 4. Adjustment in respect of unrecorded assets and liabilities; 5. Distribution of accumulated profits and losses; 6. Ascertainment of share of profit or loss up to the date of retirement/death; 7. Adjustment of capital, if required; 8. Settlement of the amounts due to retired/deceased partner;”

NCERT (2026-27 edition):
Death of a Partner – “As stated earlier, the accounting treatment in the event of death of a partner is similar to that in case of retirement of a partner, and that in case of death of a partner his claim is transferred to his executors and settled in the same manner as that of the retired partner.”