Practicing Success
Where will the debit balance of current account of a partner be shown in the balance sheet of the partnership firm? |
Liability side Assets side Either option 1 or 2 Not shown in balance sheet |
Assets side |
In fixed capital method, each partner has two accounts: a capital account and a current account. The capital account and the current account are maintained separately. The capital account always appears on the liabilities side of the balance sheet, while the balance of the current account is shown on the liabilities side if it has a credit balance, and on the assets side if it has a debit balance. |