Question

In partnership under fixed capital account method, which of the following account is opened?

• A. Partner's Capital Account
• B. Partner's Current Account
• C. (A) or (B)
• D. (A) & (B)

Answer 1

The correct option is D (A) & (B)

Fixed capital system of accounting states that the capital of partners will remain the same as in beginning.

To record any entry related to capital introduction or withdrawal, partners' capital account is prepared and to record any appropriation in the profit like interest on drawing, capital and salaries of partners, partners' current account is prepared so that therre is no change in capitals of partners.