A and B are partners, sharing profits equally. Their fixed capitals were ₹2,00,000 and ₹3,00,000 respectively. Interest on capital as provided under partnership deed @10% p.a was omitted. Select the correct option from the following:

A capital account will be debited by ₹5,000

The correct answer is option 2- A capital account will be debited by ₹5,000.

A capital account will be debited by ₹5,000 is the correct statement. 

A capital = 2,00,000
B capital = 3,00,000

Interest on capital = 10% p.a. 

A's interest = 2,00,000 x 10/100
                 = 20,000

B's interest = 3,00,000 x 10/100
                 = 30,000

Total interest = 20,000 + 30,000
                    = 50,000

This 50,000 is loss for the firm so it is distributed between partners in their profit sharing ratio i.e. 1:1.

A's share in loss = 50,000 x 1/2
                         = 25,000

B's share in loss = 50,000 x 1/2
                         = 25,000

Interest on capital is credited to partners capital account whereas loss is debited to partners capital account.
So, A's Capital A/c is credited with 20,000 and debited with 25,000. So net debit with 5,000.
So, B's Capital A/c is credited with 30,000 and debited with 25,000. So net credit with 5,000.
So, journal entry will be-
A's Capital A/c Dr.   5,000
   To B's Capital A/c        5,000

Note: There appears to be an issue in the framing of this question by the NTA. Since the question specifically mentions that the partners have fixed capitals, it implies that they are following the Fixed Capital Method of accounting. Under this method, all adjustments such as interest on capital are recorded through the Current Accounts and not through the Capital Accounts. Therefore, technically the correct answer should be “A's Current Account will be debited by ₹5,000.” However, no such option has been provided in the question.