In the case of fixed capital, partners will have
In the case of fixed capital, partners will have
a) Credit balances in their capital accounts
b) debit balances in their capital accounts
c) may have credit or debit balances in their capital accounts
d) credit balances or nil balances in their capital accounts
Anurag Pathak Changed status to publish April 9, 2023
Ans – d)
Explanation:-
In the case of the Fixed Capital Method.
The Capital Account of Partners can either show a credit balance or zero balance.
As only ‘additional capital’ and ‘drawings out of capital’ are shown in the capital account.
Partners can not withdraw more than the available capital.
Thus Capital account can not show a debit balance.
It can show zero balance if a partner withdraws his entire capital.
It can show a credit balance if there is zero withdrawal or withdrawals are less than the available capital.
Anurag Pathak Changed status to publish April 4, 2023
