Share of loss of deceased partner, calculated on the basis of previous years profit is Option 1: Credited to his capital account. Option 2: Debited to his capital account. Option 3: Debited to profit and loss suspense account. Option 4: Debited to profit and loss account.

Answer: Debited to his capital account. Solution: When a partner dies during the accounting year, their share of profit or loss needs to be calculated for the period from the start of the year till the date of death. Since final accounts are not yet prepared, this calculation is based on the previous year's profit. When there is a share of loss for the deceased partner: Loss reduces the partner's capital. Since Capital Account has a credit balance, reducing it requires a debit entry. The journal entry recorded is: Deceased Partner's Capital A/c Dr. To Profit & Loss Suspense A/c Understanding the treatment: - The deceased partner's share of loss is debited to their capital account, which reduces the amount payable to their legal heirs - Profit & Loss Suspense Account is credited (not debited) as a temporary account until final accounts are prepared - The regular Profit & Loss Account is not used here since we're dealing with an estimated loss based on previous year's figures, not the current year's actual results If it were a profit share instead, the entry would be reversed - Capital Account would be credited (increasing the amount due to heirs) and P&L Suspense Account would be debited.

Partnership

Retirement/Death

Easy

common

Share of loss of deceased partner, calculated on the basis of previous years profit is

Credited to his capital account.

Debited to his capital account.

Debited to profit and loss suspense account.

Debited to profit and loss account.

✅ Correct Option: 2

When a partner dies during the accounting year, their share of profit or loss needs to be calculated for the period from the start of the year till the date of death. Since final accounts are not yet prepared, this calculation is based on the previous year's profit.

When there is a share of loss for the deceased partner:

Loss reduces the partner's capital. Since Capital Account has a credit balance, reducing it requires a debit entry.

The journal entry recorded is:

Deceased Partner's Capital A/c Dr.

To Profit & Loss Suspense A/c

Understanding the treatment:

The deceased partner's share of loss is debited to their capital account, which reduces the amount payable to their legal heirs
Profit & Loss Suspense Account is credited (not debited) as a temporary account until final accounts are prepared
The regular Profit & Loss Account is not used here since we're dealing with an estimated loss based on previous year's figures, not the current year's actual results

If it were a profit share instead, the entry would be reversed - Capital Account would be credited (increasing the amount due to heirs) and P&L Suspense Account would be debited.

2026: 19 May Shift 1

ABC Ltd. is a firm with Amit, Ankit and Arjit as partners. The profit sharing ratio is 1:1:1. Ankit retires in the middle of the year from the firm, which of the following amount will not be considered in calculation of amount due to Ankit ?

2025: 13 May Shift 1

On retirement / death of a partner, the remaining partners who have gained due to the change in profit sharing ratio should compensate the:

2025: 30 May Shift 2

Keshav, Nirmal and Pankaj are partners sharing profits and losses in the ratio of 4 : 3 : 2. Nirmal retires and the goodwill is valued at Rs. 72,000. Keshav and Pankaj decided to share future profits and losses in the ratio of 5 : 3. Gaining Ratio of Keshav and Pankaj is:

2023: 29 May Shift 2

A, B, and C are partners with equal profit sharing ratio. Their fixed capitals are Rs. 30,000, Rs. 25,000 and Rs. 30,000 respectively. C decided to take retirement. A and B decided to continue the partnership firm and change their profit sharing ratio into Capital Ratio. What is the gaining Ratio of A and B?

2026: 20 May Shift 1

A, B and C were partners in a firm sharing profits and losses in the ratio of 5:4:1. B died on June 30, 2025. The profit for the previous three years were Rs 68,000 (For 2022-23), Rs 77,000 (For 2023-24), Rs 50,000 (2024-25) while the sales during the year 2024-25 were Rs. 4,00,000 and the sales from April 1, 2025 to June 30, 2025 were Rs. 75,000. Find the profits that the firm must have earned from the date of closing of last year's balance sheet till the date of death of B.

2026: 11 May Shift 2

MOTI, CHOTI and GUDDU are partners in a firm sharing profits according to their capitals. Their capitals as on April 1, 2025 were Rs. 1,80,000; Rs. 1,40,000; and Rs. 1,40,000 respectively. MOTI retired on above date. Goodwill of the firm is valued at Rs. 92,000 and the retiring partner's share is adjusted through the capital accounts of remaining partners. Correct Journal entry for recording effect of goodwill in the books of the firm will be:

Share of loss of deceased partner, calculated on the basis of previous years profit is

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