in case of death of a partner why the profit of the deasesed partner is credited with (profit suspense account) or debited with (loss suspense account ) ?
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profir and loss suspense account
Replies (3)
Since actual profit or loss till date of death is not availale hence it is dr/cr to PL Suspense A/c and at the end of year it is transferred to PL Appropriation A/c
usually profit or loss to be shared by partners at the end of the financial year.
but where as in case of retirement and death of the partners, firm has to settle the amounts during the financial year. so firm has to transfer profits up to the date of retirement or death. it is purely temporary adjustment entry. that's why profit and loss suspense a/c.
at the end of the F.Y. suspense a/c is to be transferred to p&l appropriation a/c.
but where as in case of retirement and death of the partners, firm has to settle the amounts during the financial year. so firm has to transfer profits up to the date of retirement or death. it is purely temporary adjustment entry. that's why profit and loss suspense a/c.
at the end of the F.Y. suspense a/c is to be transferred to p&l appropriation a/c.
according to my knowledge (and as per icai foundation module 2021) .. it is transferred to p&l account .. not p&l appropriation
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