In which method partners' capital account balance changes from year to year? |
Fixed capital method Fluctuating capital method Both of these None of these |
Fluctuating capital method |
In case of fixed capital method, the capital account balance remains unchanged unless there is any addition of capital or permanent withdrawal of capital by partner but in case of fluctuating capital method, capital account balance fluctuates from year-to-year because all transactions relating to salary, commission, interest etc are done in this account. |