Match List I with List II- When the partner's capital is fixed.

Choose the correct answer from the options given below :

A-IV, B-III, C-II, D-I

The correct answer is option 1- A-IV, B-III, C-II, D-I.

* Additional capital introduced- Credit side of partner capital account. When a partner introduces additional capital into the partnership, it increases the partner's capital. This transaction is recorded on the credit side of the capital account.

* Withdrawal of capital- Debit side of  partner capital account. When a partner withdraws capital from the partnership, it decreases the partner's capital. This transaction is recorded on the debit side of the partner's capital account.

* Drawings- Debit side of current account. When a partner withdraws funds for personal use, it's termed as drawings. This transaction is recorded on the debit side of the partner's current account,

* Salary payable to partner- Credit side of current account. When a partner is entitled to a salary from the partnership, it's recorded as a liability of the partnership. This transaction is recorded on the credit side of the partner's current account, indicating an increase in the partner's share of profits (as the salary reduces the profits available for distribution).

In the fixed capital method, the partners' capital remains unchanged unless there are agreed-upon introductions or withdrawals of capital. All financial aspects such as profit or loss share, interest on capital, drawings, and interest on drawings are recorded separately in the Partner's Current Account. Partner's current account is debited with items like interest on drawings, share in loss and credited with interest on capital, salary, commission etc. The capital accounts of the partners always maintain a fixed credit balance, except when there are capital changes. Withdrawal of capital is debited to capital account and additional capital introduced by partner is credited to capital account. In contrast, the partners' current accounts may show either a debit or credit balance. Therefore, this method involves maintaining two accounts for each partner: the capital account and the current account. The partners' capital accounts are always presented on the liabilities side of the balance sheet. On the other hand, the balances of the partners' current accounts are shown on the liabilities side if they have a credit balance and on the assets side if they have a debit balance.