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Reconstitution of Partnership : Death of a Partner

ICSE · Class 12 · Accountancy

Quick revision notes for Reconstitution of Partnership : Death of a Partner — ICSE Class 12 Accountancy. Key concepts, formulas, and definitions for last-minute revision.

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Key Topics to Revise

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1. Meaning and effect of death of a partner

  • Death of a partner necessarily dissolves the partnership but the firm continues.
  • On the death of a partner, accounts in the books of the firm are maintained in the same manner as on the retirement of a partner.
  • The only additional problem in death is the ascertainment of the deceased partner's share of accrued profit or loss.
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2. Difference between retirement and death of a partner

  • Retirement is usually planned and made effective from the closing date of an accounting year, whereas death may occur at any time without notice during the year.
  • The payment of retiring partner's share is received by himself, but the payment of deceased partner's share is received by his legal heirs.
  • If a partner is retired during the accounting year, the same rules used for death are applicable for calculating his share of profit.
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3. Calculation of deceased partner's share of profit upto date of death

  • The correct profit figure can be known only if books are closed till the date of death, which is inconvenient, so estimation methods are used.
  • Partnership deed often provides that the deceased partner's share of accruing profit be based on last year's profit, average profit, or turnover.
  • Profit may be calculated by two methods: on the basis of time or on the basis of turnover or sales.
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4. Accounting treatment of deceased partner's share of profit

  • The deceased partner's share in the profits may be readjusted in either of two ways: through Profit and Loss Suspense Account or through Capital Transfer.
  • Profit and Loss Suspense Account method is used only when the new profit sharing ratio of continuing partners does not differ from their old ratio.
  • Capital Transfer method is used only when the new profit sharing ratio of continuing partners differs from their old ratio.

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Full Notes

Key Concepts

Death of a partner necessarily dissolvesThe deceased partner's share of profitProfit may be calculated onDeceased Partner's share of profit =Deceased partner's share of profit =

Frequently Asked Questions

What are the important topics in Reconstitution of Partnership : Death of a Partner for ICSE Class 12 Accountancy?
Key topics in Reconstitution of Partnership : Death of a Partner include Step-by-Step Process for Death of a Partner, Death of Partner - Accounting Treatment Process, Death of a Partner - Complete Chapter Overview. These are the concepts ICSE Class 12 examiners draw on most — study them first, then practise related questions.
How to score full marks in Reconstitution of Partnership : Death of a Partner — ICSE Class 12 Accountancy?
Understand the core concepts first, then work through the 42 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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