On death of a partner, his executor is paid the share of profits of the dying partner for the relevant period. This payment is recorded in the Profit & Loss ______ Account.
On death of a partner, his executor is paid the share of profits of the dying partner for the relevant period. This payment is recorded in the Profit & Loss ______ Account.
The correct option is D Suspense
A P&L suspense account is used to record some fictitious profits for the purpose of settlement of share of profits to a deceased partner. It is a fictitious asset/adjusting asset used for calculation purposes and not recorded in the books of accounts.
Also, sometimes, when the books of Account are maintained in manual form, any uncorrected errors are temporarily grouped into a P&L suspense account simply for closing the books and drawing up the financial statements. Later, such errors are identified and rectified and accordingly adjusted in the books of accounts so that the balance of the P&L suspense a/c is zero.
A P&L suspense account is used to record some fictitious profits for the purpose of settlement of share of profits to a deceased partner. It is a fictitious asset/adjusting asset used for calculation purposes and not recorded in the books of accounts.
Also, sometimes, when the books of Account are maintained in manual form, any uncorrected errors are temporarily grouped into a P&L suspense account simply for closing the books and drawing up the financial statements. Later, such errors are identified and rectified and accordingly adjusted in the books of accounts so that the balance of the P&L suspense a/c is zero.
