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Difficulty: EasyRetirement and Death of a Partner

Complete the sentence below by providing the correct accounting title used upon the death of a partner.

Answer:Upon the death of a partner, the net total amount due to the deceased partner is transferred from their capital account to the 【Executor's】 account.

Answer

Executor's account (or Executor's Loan account)
When a partner dies, all final adjustments (revaluation profit/loss, share of goodwill, accrued profits, drawings) are credited or debited to the deceased partner's capital account. The resulting balance represents the total debt owed by the firm to the deceased partner's estate, which is closed by transferring it to the Executor's account.

Step-by-Step Solution

1
Identify the legal representative account used to settle claims of a deceased partner.
The balance on the deceased partner's capital account represents a legal claim payable to their estate.
A deceased person cannot remain an active partner in the firm, so the account is closed by transferring the final balance to an Executor's account.

Key Concept

Accounting settlement upon the death of a partner
Estimated Time:45s
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Topics

Retirement and Death of a Partner

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