Where will the debit balance of current account of a partner be shown in the balance sheet of the partnership firm?

Assets side

The correct answer is option 2- Assets side.

The debit balance of current account of a partner is shown on the assets side of the balance sheet of the partnership firm.

In fixed capital method, each partner has two accounts: a capital account and a current account. The partners’ capital accounts will always show a credit balance, which shall remain the same (fixed) year after year unless there is any addition or withdrawal of capital. The partners’ current account on the other hand, may show a debit or a credit balance. While the partners’ capital accounts shall always appear on the liabilities side in the balance sheet, the partners’ current account’s balance shall be shown on the liabilities side, if they have credit balance and on the assets side, if they have debit balance.