Which among the following is not the feature of a fixed capital method by which the capital accounts of partners can be maintained?

Under the Fixed Capital Method, each partner has two accounts:

• Capital Account - remains fixed
• Current Account - records all regular adjustments

Let's examine each statement:

Option 1: Two separate accounts (Capital and Current) are maintained → This is correct. This is the fundamental characteristic of the Fixed Capital Method.

Option 2: Drawings, salary, interest on capital are posted in Current Account → This is correct. All adjustments like interest on capital, partner's salary, drawings, interest on drawings, and share of profit/loss are recorded in the Current Account to keep the Capital Account balance unchanged.

Option 3: Capital account shows debit balance → This is incorrect. The Capital Account always shows a credit balance under the Fixed Capital Method as it represents the partner's contribution to the business. A debit balance would mean the partner owes money to the firm, which contradicts the nature of capital.

Option 4: Capital account balance remains unchanged unless capital is added or withdrawn → This is correct. This is why it's called "Fixed" Capital Method - the balance changes only when there is fresh capital introduction or permanent capital withdrawal.

The correct answer is Option 3 because capital accounts always show credit balances (representing investment), never debit balances, under the Fixed Capital Method.