Partnership

Accounting

Easy

Which of the following entry shows withdrawal of excess capital by partner's ?:

Partner's capital A/c is debited and Cash/Bank A/c is credited

Cash/Bank A/c is debited and partner's capital A/c is credited

Drawings A/c is debited and profit and loss A/c is credited

Profit and loss A/c is debited and Drawings A/c is credited

✅ Correct Option: 1

When a partner withdraws excess capital from the business, it results in:

Decrease in Partner's Capital - This is recorded by debiting the Partner's Capital Account (as capital is a liability/owner's equity, decrease is shown on debit side)
Outflow of Cash/Bank - This is recorded by crediting the Cash/Bank Account (as asset decreases)

Journal Entry:

Partner's Capital A/c ... Dr.

To Cash/Bank A/c

Analysis of other options:

Option 2 represents the opposite situation - when a partner brings in additional capital into the business, Cash/Bank is debited and Partner's Capital is credited.

Options 3 & 4 involve Drawings Account and Profit & Loss Account. While Drawings Account is used for regular withdrawals by partners, the term "excess capital" specifically refers to a capital adjustment. The direct entry for capital withdrawal is made through the Partner's Capital Account itself, not through Drawings or P&L accounts.

Correct Answer: Option 1

2025: 3 June Shift 2

Match List-I with List-II

List-I	List-II
(A) Bank (fresh capital introduced)	(I) Debit side of Partner's Current Account
(B) Interest on drawings	(II) Debit side of Partner's Capital Account
(C) Bank (permanent withdrawal of capital)	(III) Credit side of Partner's Current Account
(D) Commission	(IV) Credit side of Partner's Capital Account

Choose the correct answer from the options given below:

2026: 11 May Shift 1

Choose the correct order in calculation of the goodwill of the firm by Super Profit Method.

A. Calculation of Super Profit

B. Calculation of Normal Profit

C. Calculation of Capital Employed by the firm

D. Calculation of goodwill of the firm

Choose the correct answer from the options given below:

2025: 24 May Shift 1

By virtue of which section of the Indian Partnership Act 1932, partnership is defined as 'the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all'.

2025: 14 May Shift 1

In case partner's capital is fixed, then where interest on drawings charged will be shown?

2025: 15 May Shift 2

Accounting treatment for a partnership firm is similar to that of a sole proprietorship business except the following aspects:

(A) Distribution of Profit and Loss among the partners

(B) Dissolution of Partnership Firm

(D) Adjustments for Wrong Appropriation of Profits in the Past

Choose the correct answer from the options given below:

2022: 23 Aug Shift 2

Calculate net profit as per P & L A/c for the year ending 31 March, 2022 from the following information :

share of profit transferred to Capital A/c's of partners :

Ram Rs. 7,000

Shyam Rs. 3,500

Interest on capital :

Ram Rs. 1,500

Shyam Rs. 500

Interest on Drawings :

Ram Rs. 300

Shyam Rs. 200

Ram's salary Rs. 1,000

Which of the following entry shows withdrawal of excess capital by partner's ?:

Solution

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