CUET Preparation Today
Where will the fixed capital account balance be shown in the balance sheet of the partnership firm? |
Assets side Liability side Either option 1 or 2 None of these |
Liability side |
The correct answer is option 2- Liability side. The fixed capital account balance is shown on the liability side of the balance sheet of the partnership firm. In fixed capital method, each partner has two accounts: a capital account and a current account. The capital account and the current account are maintained separately. The capital account always appears on the liabilities side of the balance sheet, while the balance of the current account is shown on the liabilities side if it has a credit balance, and on the assets side if it has a debit balance. |
