Accountancy Part AAccounting for Partnership

When the capital accounts are fixed, additional capital introduced by…

When the capital accounts are fixed, additional capital introduced by the partner is:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Credited to capital account

Under the fixed capital method, the capital account changes only when capital itself changes: additional capital introduced is credited to it and permanent withdrawal of capital is debited. All other items such as profit share, drawings and interest go to the current account.

Option (1) Credited to current account — Incorrect. The current account takes the periodic items, not changes in capital.

Option (2) Debited to current account — Incorrect. Wrong account and wrong side; money brought in is credited to the partner.

Option (4) Debited to capital account — Incorrect. The capital account is debited when capital is withdrawn, not introduced.

NCERT (2026-27 edition):
Maintenance of Capital Accounts of Partners – “… (a) Fixed Capital Method: Under the fixed capital method, the capitals of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement among the partners.”