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Question
Assertion (A): Unrecorded assets and liabilities are not accounted for at the time of death of a partner.
Reason (R): Unrecorded assets and liabilities are recorded in the books at the time of death of a partner because they came into existence when all the partners, including the deceased partner, were partners in the firm.
In the context of the above two statements, which option is correct?
Options
Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is correct, but Reason (R) is not correct.
Assertion (A) is not correct, but Reason (R) is correct.
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Solution
Assertion (A) is not correct, but Reason (R) is correct.
Explanation:
The assertion is false; unrecorded assets and liabilities that exist on the date of a partner’s death are brought into the books by passing the necessary journal entries. The reason is correct; these items are recorded because they arose while the deceased was a partner.
