There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion(A):  Current account is opened in case of the fixed capital method by the partnership firm.
Reason(R): Current account records permanent withdrawal of capital.

A is true but R is false

Under the fixed capital method, the capitals of the partners shall remain fixed unless additional capital is introduced or apart of the capital is withdrawn as per the agreement among the partners. All items like share of profit or loss, interest on capital, drawings, interest on drawings, etc. are recorded in a separate account, called Partner Current Account. 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 partners’ current account on the other hand, may show a debit or a credit balance. Thus under this method, two accounts are maintained for each partner viz., capital account and current account, While the partners’ capital accounts shall always appear on the liabilities side in the balance sheet, the partners’ current account’s balance shall be shown on the liabilities side, if they have credit balance and on the assets side, if they have debit balance.