The share of loss of a deceased partner, calculated on the basis of previous year's profit/loss, is:
- ACredited to his capital account.
- BDebited to his capital account.
- CDebited to profit and loss suspense account.
- DDebited to profit and loss account.
Solution & Step-by-step Explanation
The sharing of an interim loss reduces the deceased partner's capital balance. Hence, their share of loss up to the date of death is debited to the Deceased Partner's Capital Account and credited to the Profit and Loss Suspense Account.The adjusting entry is: