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Partnership Deed

Current Capit...

Question

Current Capital A/c of the partners are opened when _____.

A

Capital is fluctuating

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B

Capital is fixed

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C

Capital is fixed as well as fluctuating

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D

Fresh capital is added

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Solution

The correct option is B Capital is fixed
The balance of Current Account keeps changing, and Capital Account is prepared only when the Partner's Capital is fixed. Various transactions like interest on capital, drawings etc are recorded in Current Account. The closing balance could either be a debit or a credit balance.

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