Accountancy Part AAccounting for Partnership

The capital accounts of partners will always show a.................b…

The capital accounts of partners will always show a.................balance under fixed capital account method.

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Credit

Under the fixed capital method, profit, interest, salary and drawings all pass through the partners’ current accounts. The capital account holds only the capital the partner has brought in, so it always shows a credit balance. Only the current account can show a debit balance.

NCERT (2026-27 edition):
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the capitals of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement among the partners. All items like share of profit or loss, interest on capital, drawings, interest on drawings, etc. are recorded in a separate accounts, called Partner’s 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.”