How much profit is transferred in the profit and loss suspense account at the time of death of the partner?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Share in profit for current year till death of partner.
For being deceased partner’s share of profits for the intervening period to books of account, the following journal entry is recorded.
Profit and Loss (Suspense) A/c Dr.
To Deceased Partner’s Capital A/c
(Share of profit for the intervening period)
Profit upto the death of the partner i.e. interim period (start of current financial year upto death of partner) is transferred through profit and loss suspense account.