Question:
When the partners’ capitals are fixed, the drawings made by a partner are recorded on the :
When the partners’ capitals are fixed, the drawings made by a partner are recorded on the :
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In fixed capital system, capital accounts remain constant and all transactions like drawings or interest are routed through the current account.
Updated On: Jul 4, 2025
- Debit side of Partner’s Capital Account.
- Credit side of Partner’s Capital Account.
- Debit side of Partner’s Current Account.
- Credit side of Partner’s Current Account.
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The Correct Option is C
Solution and Explanation
In a fixed capital system:
- **Capital accounts remain unchanged**, except for additional capital or permanent withdrawals.
- All routine items like drawings, interest, and share of profit/loss are recorded in the **Current Account**.
Hence, **drawings** are shown on the **debit side** of the partner’s **Current Account**.
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