Q.Profit and loss suspense account is shown in the new balance sheet on ______ side.

Correct option: Asset. The Profit and Loss Suspense Account normally has a debit balance (the share of profit credited to the deceased partner up to the date of death), and a debit balance is shown on the assets side.

Explanation

When a partner dies part-way through the year, his estimated share of profit up to the date of death is credited to his Capital/Executor's Account and debited to the Profit and Loss Suspense Account. Because this account is debited, it carries a debit balance until the firm's final profit is as …