Question

state the two methods of maintaining capital account of partners.

Answer 1

There are two method of maintaining capital account of partners.
Dear student,
1)Fixed Capital method -
Under this method the original capital invested by the partners remain constant, unless additional capital is introduced by an agreement. When this method is adopted , all entries relating to drawings , interest on capital, interest on drawing, salary to partner ,ect. are recorded in the current account.
2) Fluctuating capital method-
Under this method the balance of capital accounts go on changing from time to time. The reason is that no separate current accounts are maintained ,but all entries relating to drawings , interest on capital, interest on drawing, salary to partner ,ect. are recorded in the capital accounts itself.

regards.