Partner's current accounts are transferred to respective Partners' _____________________.

Partners' current accounts maintain a record of transactions like interest on capital, salary, commission, drawings, and interest on drawings. These are separate from the capital accounts.

When preparing for final settlement (either during dissolution or routine closure), the balance in each partner's current account needs to be transferred to their respective Capital Account. This consolidates all amounts due to or from each partner into one account.

The journal entry would be:

If Current Account has a credit balance (amount due to partner):

Particulars	Debit (₹)	Credit (₹)
Partner's Current A/c Dr.	xxx
To Partner's Capital A/c		xxx

If Current Account has a debit balance (amount due from partner):

Particulars	Debit (₹)	Credit (₹)
Partner's Capital A/c Dr.	xxx
To Partner's Current A/c		xxx

This transfer ensures that all partner-related balances are consolidated in the capital account before final payment is made through bank. The capital account then becomes the single account showing the net amount payable to or receivable from each partner.

Correct Answer: Option 2 - Capital Accounts