Question

Which of the following items cannot be recorded in the capital account of partners if the capital accounts of partners are fixed?

• A. Drawings
• B. Withdrawal of capital
• C. Introduction of additional capital
• D. Opening balance of capital

Hint:

In a partnership with fixed capital accounts, adjustments like drawings, interest, and share of profits/losses are always recorded in the current account, not in the fixed capital account.

Answer 1

The Correct Option is A

In a partnership firm, when the capital accounts of partners are fixed, only the permanent contributions of capital (such as opening balance, additional capital, or withdrawal of capital) are recorded in the fixed capital account. Adjustments like drawings, interest on capital, and share of profits/losses are recorded in the current account. Hence, drawings cannot be recorded in the fixed capital account, making the correct answer \( (A) \).