Which of the following are shown under capital account in case capita…

Which of the following are shown under capital account in case capital of partner's are fixed?

(A) Fresh capital introduced

(B) Permanent capital withdrawn

(D) Amount of capital brought down from the previous year

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A), (B) and (D) only

Under the fixed capital method each partner has two accounts. The capital account records only the capital itself and its permanent changes; everything else that belongs to the partner, such as share of profit, interest on capital, drawings and salary, goes to his current account.

(A) Fresh capital introduced — Correct. Additional capital is a permanent addition, so it is credited to the capital account.

(B) Permanent capital withdrawn — Correct. A withdrawal of capital (not ordinary drawings) reduces the fixed capital, so it is debited to the capital account.

(C) Interest on capital — Incorrect. Interest on capital is a periodic item, so it is credited to the current account; that is what keeps the capital fixed.

(D) Amount of capital brought down from the previous year — Correct. The opening balance b/d is the capital itself, carried forward year after year.

NCERT (2026-27 edition):
Maintenance of Capital Accounts of Partners – “… (a) 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the capitals of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn as per the agreement among the partners.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.”