Question

Balance in the Deceased Partner’s Capital Account after adjustments is transferred to ______.

Options

• Remaining Partners’ Capital Accounts.

• Bank Account.

• Deceased Partner’s Executor’s Account.

• Loan Account.

Answer 1

Balance in the Deceased Partner’s Capital Account after adjustments is transferred to the Deceased Partner’s Executor’s Account.

Explanation:

After making all necessary adjustments for profits, goodwill, and revaluation, the final balance of the deceased partner’s capital account must be closed. Since payment cannot be made directly to a deceased person, the entire amount is legally transferred to their legal representative or heir. This is done by crediting the Deceased Partner’s Executor’s Account using the journal entry: Deceased Partner’s Capital A/c Dr. to Deceased Partner’s Executor’s A/c. This account acts as a liability for the firm until the money is officially paid out.