The correct answer is option 4- A-I, B-IV, C-III, D-II.
LIST I
|
LIST II
|
| A) Current Account |
I) Fixed Capital Method |
| B) Average period |
IV) Interest on drawings |
| C) Capital Account |
III) Fluctuating Capital Method |
| D) 2 person |
II) Minimum No. of partners |
* Current Account- According to the fixed capital method, the partners' capital remains unchanged unless additional capital is added or a portion of it is withdrawn, as agreed upon by the partners. Transactions such as profit or loss distribution, capital interest, drawings, and interest on drawings are recorded in a separate account known as the Partner's Current Account. The capital accounts of the partners will always maintain a consistently positive balance, which remains unchanged from year to year unless there are capital injections or withdrawals. While maintaining capital account under this method, additional capital is credited to the capital account, and the permanent withdrawal is debited to the capital account.
* Average period- Average period is calculated for calculating interest on drawings and the average period depends on the timing of withdrawal. The formula for calculating the average period is = (Months left after Ist drawing + Months left after last drawing) / 2
After calculating the average period interest on drawings is calculated. The formula for calculating interest on drawing is = Total drawings X Rate of interest/100 X Average period/12
* Capital Account- Fluctuating capital is a type of capital account which changes/fluctuates every time there is addition in capital or when capital is withdrawn. Interest on capital, profit, salary, commission all appears on the credit side and interest on drawings, drawings appears on the debit side.
* 2 person- In order to form partnership, there should be at least two persons coming together for a common goal. In other words, the minimum number of partners in a firm can be two. There is, however, a limit on their maximum number. By virtue of Section 464 of the Companies Act 2013, the Central Government is empowered to prescribe maximum number of partners in a firm, but the number of partners cannot be more than 100. The Central government has prescribed the maximum number of partners in a firm to be 50. |
