Question

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

Options

• Debited to Profit and Loss Account

• Credited to Profit and Loss Account

• Debited to Profit and Loss Suspense Account

• Credited to Profit and Loss Suspense Account

Answer 1

John, Honey and Racob were partners in a firm sharing profits and losses equally. On 31^st July, 2025 John died. His share in the profits of the firm from the date of last balance sheèt till the date of his death will be debited to Profit and Loss Suspense Account.

Explanation:

Since the exact profit of the current year is not known until the final accounts are prepared, a temporary account called the Profit and Loss Suspense Account is used. John’s Capital Account is credited for his share of profit, so the Profit and Loss Suspense Account is debited.