Choose the correct combination related to death of a partner:(A) In c…

Choose the correct combination related to death of a partner:

(A) In case of death of a partner his claim is transferred to his executors.

(B) Deceased partner's share of profit may be calculated on the basis of last year's profit or on the basis of sales.

(D) Deceased partner's claim shall include his interest on capital, interest on drawings (if any) till the date of his death.

Answer & explanation

Correct answer: option 1

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

Death is treated like retirement, with one difference: it can happen at any time in the year, so the claim has to cover the period from the last Balance Sheet to the date of death.

(A) In case of death of a partner his claim is transferred to his executors. Correct. The amount due is settled with his executors, in the same manner as with a retiring partner.

(B) Deceased partner’s share of profit may be calculated on the basis of last year’s profit or on the basis of sales. Correct. Closing the books in the middle of the year is cumbersome, so his share of profit for the broken period is estimated from last year’s (or average) profit, or from sales.

(C) Deceased partner’s share of general reserve shall be calculated till the date of his death only. Incorrect. General reserve is not worked out for a period. It is the accumulated profit standing in the books, and he gets his share of that balance in the old profit sharing ratio.

(D) Deceased partner’s claim shall include his interest on capital, interest on drawings (if any) till the date of his death. Correct. Interest on capital and interest on drawings are worked out up to the date of death and taken into his account: interest on capital is added to the claim, while interest on drawings is deducted from it.

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. However, there is one major difference that, while the retirement normally takes place at the end of an accounting period, the death of a partner may occur any time. Hence, in case of a partner, his claim shall also include his share of profit or loss, interest on capital, interest on drawings (if any) from the date of the last Balance Sheet to the date of his death of these, the main problem relates to the calculation of profit for the intervening period (i.e., the period from date of the last balance sheet and the date of the partner’s death. Since, it is considered cumbersome to close the books and prepare final account, for the period, the deceased partner’s share of profit may be calculated on the basis of last year’s profit (or average of past few years) or on the basis of sales.”