Partner's current accounts are transferred to respective _____ partner's accounts.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Capital
Under the fixed capital method each partner has two accounts, a capital account and a current account. On dissolution the firm needs one balance per partner to settle with him, so the current account balance is transferred to his capital account and the capital account is then closed by payment. A current account is not a loan to the firm, and it never goes to the Realisation Account.
NCERT (2026-27 edition):
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