Page 1 - LM DEATH OF A PARTNER
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CLASS – XII
ACCOUNTANCY
DEATH OF A PARTNER
Meaning :
According to the Indian Partnership Act, 1932. Under a contract between the
partners of the enterprise is not dissolved by the death of a partner, the estate
of a dead partner is not responsible for any act of the enterprise done after his
death
Accounting Treatment on death of a Partner :
The accounting treatment in the occurrence of death of a partner is :
• Similar to that, when a partner retires and that in case of deceased
partner his belonging is transferred to his legal enforcers and settled in a
similar way as that of the partner who retires
• However, there is one primary distinction, the retirement usually takes
place during the closure of an accounting period or financial year, the
death of a partner may take place any time
• Therefore, in the case of a partner, his rights shall also incorporate his
share of gains or loss, interest on drawings (if any), interest on capital
from the last date of the Balance Sheet to the date of his death of these,
the main issue associates to the computation of profit for a moderate
period
