Question

The balance of Current Account can be:

• A. Positive
• B. Negative
• C. Zero
• D. All of these

Hint:

Current Account balance depends on adjustments – it may be positive, negative, or zero.

Answer 1

The Correct Option is D

Step 1: Current account meaning.
In partnership, when fixed capital method is used, all adjustments like interest on capital, drawings, profit share, and interest on drawings are recorded in the Current Account.
Step 2: Possible balances.
- Positive balance: When credits (profits, interest on capital) exceed debits.
- Negative balance: When debits (drawings, losses, interest on drawings) exceed credits.
- Zero balance: When both sides equalise.
Step 3: Conclude.
Hence, the Current Account can have positive, negative, or zero balance.
Final Answer: \[ \boxed{\text{All of these}} \]