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Question

Objective type questions :-
Answer in one sentence only.

What do you mean by Fixed Capital Method?

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Solution

When capital accounts of the partners are maintained under fixed capital method, then the capital of the partners remains unchanged or unaltered. It alters only in case of permanent change in capital (i.e. additional capital introduced or withdrawal of capital). In this method, two accounts, namely, Capital Account and Current Account are prepared.

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