Question

John, Honey and Racob were partners in a firm sharing profits and losses equally. On 31st July, 2025 John died. His share in the profits of the firm from the date of last balance sheet till the date of his death will be:

• A. Debited to Profit and Loss Account
• B. Credited to Profit and Loss Account
• C. Debited to Profit and Loss Suspense Account
• D. Credited to Profit and Loss Suspense Account

Hint:

On death of a partner:

• Share of profits till death = Estimated
• Journal Entry: \[ \begin{array}{ll} \text{P\& L Suspense A/c} & \text{Dr.}
  \quad \text{To Deceased Partner's Capital A/c} \end{array} \]

The suspense account is later adjusted when actual profits are known.

Answer 1

The Correct Option is D