Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

In which method partners' capital account balance changes from year to year?

Options:

Fixed capital method

Fluctuating capital method

Both of these

None of these

Correct Answer:

Fluctuating capital method

Explanation:

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.