What will be the sequence of events in case of death of a partner in…

The correct answer is Option (1) → (D), (C), (B), (A)

On a partner’s death, everything due to him is first collected in his capital account, and only the final balance is passed on to his executors. So the order follows how that balance is built up.

(D) Revaluation of assets and liabilities — comes first. It puts the assets and liabilities at their correct values, and the gain or loss goes to all the partners’ capital accounts, the deceased partner’s included.

(C) Calculate share of Profit upto date of death for the deceased partner — comes next. A partner may die on any day of the year, so his share of profit from the last Balance Sheet date to the date of death has to be worked out and credited to him.

(B) Prepare Deceased Partner’s Capital A/c — is prepared once all these amounts are known. It brings together his capital, share of goodwill, reserves, revaluation gain and profit to the date of death, less his drawings.

(A) Prepare Deceased Partner’s Executor’s A/c — comes last. The balance of his capital account is transferred to his executor’s account, and payment is made to the executors from there.