Question

Following are the differences between Capital Amount and Current Account ______________.

• A. Capital Account is prepared under fixed capital method whereas current account is prepared under fluctuating capital method.
• B. In capital account only capital introduced and withdrawn is recorded, all order transactions between the firm and partners is recorded in the current account.
• C. Interest is sometimes paid on capital account balance but no such interest is payable on current account balances.
• D. Both (b) and (c).

Answer 1

The correct option is A Capital Account is prepared under fixed capital method whereas current account is prepared under fluctuating capital method.

The current and capital accounts are two components of a nation

's balance of payments

• current account :- An account which records the export and import of merchandise and unilateral transfers done during the year by a nation are known as current account

Net Income of the country

• capital account :- An account which records the trading of foreign assets and liabilities during the year by a country is known as capital account.

Net change in ownership in national assets.