Partner's current accounts are transferred to respective Partners'........
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Capital Accounts
Under the fixed capital method, a partner’s current account holds his share of profit, interest, salary and drawings. On dissolution every partner’s claim is settled through one account, so the balance of each current account is transferred to his capital account, and the capital account is then closed by payment.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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