Which of the following is not the feature of fluctuating capital in partnership?

The partners' capital accounts will always show a credit balance, which shall remain the same (fixed) year after year unless there is any addition or withdrawal of capital.

The correct answer is Option (2) → The partners' capital accounts will always show a credit balance, which shall remain the same (fixed) year after year unless there is any addition or withdrawal of capital.

Under the Fixed Capital Method (and not under fluctuating capital method), the balance of the capital account is intended to remain constant (fixed) year after year, unless the partner intentionally introduces or withdraws permanent capital. All routine adjustments (like profit, interest, drawings) are recorded in a separate Current Account.

"Fluctuating Capital Method: Under the fluctuating capital method, only one account, i.e. capital account is maintained for each partner. All the adjustments such as share of profit and loss, interest on capital, drawings, interest on drawings, salary or commission to partners, etc are recorded directly in the capital accounts of the partners. This makes the balance in the capital account to fluctuate from time to time. That’s the reason why this method is called fluctuating capital method. In the absence of any instruction, the capital account should be prepared by this method."