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Introduction to Retirement

Joint life po...

Question

Joint life policy amount received from insurance company in excess of its surrender value is credited to the capital account of the partners.

A

In profit-sharing ratio

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B

Equally

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C

In capital ratio

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D

All of these

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Solution

The correct option is A In profit-sharing ratio
b'
The firm pays the premium on the Joint Life Policy. The Insurance Company pays the amount of the Joint Life Policy on the maturity of the policy or the death of a partner, whichever is earlier.
The surrender value at the time of the death of a partner is distributed among the remaining partners and the legal representative of the deceased partner.
'

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Similar questions

Q. The amount received from the insurance company on joint life policy of partners in excess of its surrender value should be credited to partners ________________.

Q. Select the most appropriate answer from the alternatives given below :

An amount received from the Insurance Company against the joint life policy is __________.
a) debited to deceased partner
b) credited to deceased partner
c) credited to continuing partners capital A/c
d) credited to all partners capital A/c in their profit sharing ratio.

Q. A, B and C takes a Joint Life Policy. After five years B retires from the firm. Old profit sharing ratio is 2: 2: 1. After retirement A and C decide to share profits equally. They had taken a Joint Policy of Rs. 2,00,000 with the surrender value Rs. 30,000. What will be the treatment in the partner's capital account on receiving the JLP amount if joint life policy A/C is maintained at surrender value along with the reserve for JLP?

Q. On the death of a partner, the amount of joint life policy should be credited to the capital account of _________.

Q. A, B & C takes a joint life policy, after

5

years B retires from the firm. Old profit sharing ratio is

2 : 2 : 1

. After retirement A and C decides to share profits equally. They had taken a joint life policy of

R s .2, 50, 000

with the surrender value

R s .50, 000

. What will be the treatment in the partner's capital account on receiving the JLP amount if joint life policy premium is fully charged to revenue as and when paid?

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