Question

The Deceased Partners Capital Account includes the following amount/balances:
(A) Opening balance of his capital
(B) His share of profit/loss till the date of death
(C) His share of General Reserve
.(D) His drawings till the date of death
(E) Amount paid to his executors

• A. A, B, D, and E only
• B. A, B, C, and D only
• C. A, B, and C only
• D. A, B, C, and E only

Answer 1

The Correct Option is D

Contents of a Deceased Partner's Capital Account 

When a partner in a firm passes away, it is necessary to prepare a Deceased Partner's Capital Account to determine the amount due to their legal representatives (executors). This account summarizes the partner's financial position in the firm up to the date of their death.

Contents of the Deceased Partner's Capital Account

The Deceased Partner's Capital Account typically includes the following:

• Opening Balance: The balance in the partner's capital account at the beginning of the accounting period.
• Share of Profit/Loss: The partner's share of the firm's profit or loss from the beginning of the accounting period up to the date of death.
• Share of General Reserve: The partner's share of any general reserve or accumulated profits that have not yet been distributed.
• Interest on Capital: Any interest due to the partner on their capital contribution.
• Drawings: Any amounts withdrawn by the partner during the accounting period.
• Interest on Drawings: Any interest charged on the partner's drawings.
• Amount Paid to His Executors: The final amount paid to the deceased partner's legal representatives, representing the settlement of their claim on the firm.

Items that increase the capital account will be on the Credit side and items that decrease will be debited to the capital accounts.

Conclusion

Therefore, the correct answer, as it describes components of deceases partners account, is Option 4.The Deceased Partners Capital Account includes the opening balance, share of profit/loss, share of general reserve, and the amount paid to his executors.

Answer 2

Adjustments to a Deceased Partner's Capital Account

When a partner dies, certain adjustments are made to their capital account to determine the amount payable to the partner's executors (legal representatives). The following items are typically included in the deceased partner's capital account:

1. Opening Balance of Capital (A): This is the initial capital balance of the deceased partner at the start of the financial period. It represents the partner's investment in the firm.
2. Share of Profit/Loss Till Date of Death (B): The deceased partner’s share in the profit or loss from the beginning of the financial year until their date of death is credited (if profit) or debited (if loss) to the account. This reflects the partner's earnings during their time in the firm during the current period.
3. Share of General Reserve (C): The partner’s share in any accumulated reserves, such as the general reserve, is credited to their capital account. These reserves represent undistributed profits from previous years that the partner is entitled to.
4. Drawings (D): Drawings made by the partner until the date of death are debited from the partner’s capital account. Drawings represent withdrawals of capital made by the partner during their lifetime. While drawings are relevant, the question specifically asked about items included as *balances or amounts credited* - drawings are debited.
5. Interest on Capital (If applicable): Interest on Capital, if applicable, is credited to the account.
6. Goodwill (Share of Goodwill): Share of goodwill is also adjusted in the partner’s capital account and is added as per his share of the goodwill.
7. Amount Paid to Executors (E): This represents the final settlement amount paid to the partner’s estate after adjusting all credits and debits as mentioned above. This is the resulting amount, *not an initial amount or balance*.

Based on the question's focus on items included as *balances or amounts credited* (other than the final settlement), and considering common capital account adjustments, the relevant items are A, B, and C.

Therefore, the answer based on the provided context and the question's wording is Option (4): (A), (B), and (C) only.

Note that D (drawings) is important as it's *debited*, but not an amount credited. Also note E is a resulting balance of all the adjustment, not an amount adjusted.