CUET CUET Accountancy 2024 - A, B and C are partners sharing profits in the ratio of 3:2:1. C died on 1st July, 2023. On this date, final accounts were prepared to ascertain profits for the period. It resulted in a profit of ₹ 1,75,000 to the firm. To give effect to the above: | PYQs + Solutions

CUET Accountancy 2024

Accountancy

Retirement/Death of a Partner

Easy

A, B and C are partners sharing profits in the ratio of 3:2:1. C died on 1st July, 2023. On this date, final accounts were prepared to ascertain profits for the period. It resulted in a profit of ₹ 1,75,000 to the firm. To give effect to the above:

Profit and Loss Account will be debited

Profit and Loss Appropriation Account will be debited

Profit and Loss Account will be credited

Profit and Loss Appropriation Account will be credited

Correct Option: 2

A, B, and C share profits in a ratio of 3:2:1. C died on 1st July 2023, and the firm made a profit of ₹ 1,75,000.

When preparing accounts after a partner's death, we need to show how profits are distributed.

Profit and Loss Appropriation Account is used to allocate profits among partners.

Since we need to distribute the profit, we debit the Profit and Loss Appropriation Account.

Thus, the correct answer is Option 2: Profit and Loss Appropriation Account will be debited.