Question

On death of a partner, his share of loss in the firm till the date of his death is transferred to the ______.

Options

• Debit of Profit & Loss Account.

• Credit of Profit & Loss Account.

• Debit of Profit & Loss Suspense Account.

• Credit of Profit & Loss Suspense Account.

Answer 1

On death of a partner, his share of loss in the firm till the date of his death is transferred to the Credit of Profit & Loss Suspense Account.

Explanation:

On a partner’s death the firm allocates profit or loss up to the date of death and adjusts the deceased partner’s capital account; where there is a loss the deceased partner’s Capital A/c is debited and the corresponding entry is made to the Profit & Loss Suspense A/c (i.e., the loss is credited to Profit & Loss Suspense).