Which of the following statements is incorrect regarding capital account?

Debit increases the capital account balance

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Credit increases the capital account balance

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Fresh capital increases the capital account balance

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Net income increases the capital account balance

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Solution

The correct option is A
Debit increases the capital account balance

A debit in capital always decreases its balance. All the other options are correct with regards to capital.

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Similar questions

Under ___ method , the capital account always shows a credit balance.

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