Give two differences between Fixed and Fluctuating Capital Accounts
Give two differences between Fixed and Fluctuating Capital Accounts
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Answer:-
| Basis | Fixed Capital Account | Fluctuating Capital Account |
| No. of Accounts maintained | Each partner has two accounts:
i) Capital Account and ii) Current Account |
Each Partner has only one account, i.e., Capital Account. |
| Frequency of Change | Under this method, the balance of the Capital Account normally remains unchanged during the life of the firm except when Capital is introduced or it is withdrawn. | In the case of Fluctuating Capital Account balance in the Capital Accounts changes with every transaction. |
| Balance | Fixed Capital Account can not have a debit (negative) balance. | Fluctuating Capital Account can have a debit balance. |
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