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profir and loss suspense account

14 October 2018

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 ) ?

please ans.

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Prakash Gehani (Consultant & Teacher(Whatsapp 8718057907)) (1306 Points)
Replied 14 October 2018

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

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satish (teaching) (2046 Points)
Replied 16 October 2018

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.

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