The executors of the deceased partner are entitled to a share of profit earned by the firm from the date of last balance sheet and to the date of death. Which of the entry will be passed for this purpose? (Name of the deceased partner was Mr.X)

Profit & Loss Suspense A/c Dr
To X A/c

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X A/c Dr
To Profit & Loss A/c

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X A/c Dr
To Memorandum Revaluation A/c

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X A/c Dr
To Profit & Loss Suspense A/c

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Solution

The correct option is A Profit & Loss Suspense A/c Dr
To X A/c
Payment on deceased partner's death:
On the death of a partner, the executor of the deceased partner is entitled to share of profit upto the date of death.
Journal entry for this is :
Profit & Loss Suspense A/c * Dr
To X A/c
* At the end of the year, the profit and loss suspense A/c will be transferred to profit and loss A/c.

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