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Final Settlement with Partner (Dissolution)

If partners m...

Question

If partners maintain both fixed capital and current accounts, which of the following would normally be credited to a partner's capital accounts?

A

Profits on revaluation

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B

Losses on revaluation

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C

Interest on capital

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D

Goodwill being written off

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Solution

The correct option is A Profits on revaluation
Under a fixed capital system, current account is prepared along with their fixed capital account.
The fixed capital account records only those entries which are related to addition or withdrawl of capital.

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Final Settlement with Partner (Dissolution)

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