When the current account balances are given and in the question it's asked to prepare capital accounts using fluctuating capital method , then what has to be done with the current account balances ?
When the current account balances are given and in the question it's asked to prepare capital accounts using fluctuating capital method , then what has to be done with the current account balances ?
Whenever current account balances are given in the question then it is obvious that Partner's current accounts are to be prepared and the balances given are to be brought down. But if it is specified that Capital accounts are prepared using fluctuating capital method then all the adjustments related to partner's capital are made using Partner's Capital Account itself, however in questions where balance of current account is given and also it is strictly mentioned that Partner's Account are prepared using Fluctuating capital Method, practically such questions are very hard to find, in such cases we ignore the balances of current account and simply make partner's capital account.
Whenever current account balances are given in the question then it is obvious that Partner's current accounts are to be prepared and the balances given are to be brought down. But if it is specified that Capital accounts are prepared using fluctuating capital method then all the adjustments related to partner's capital are made using Partner's Capital Account itself, however in questions where balance of current account is given and also it is strictly mentioned that Partner's Account are prepared using Fluctuating capital Method, practically such questions are very hard to find, in such cases we ignore the balances of current account and simply make partner's capital account.
