Partnership

Accounting

Easy

common

Which of the following is not a part of capital account under the fixed Capital Method?

Permanent Withdrawl from capital

Opening Balance of Capital

Drawings

Additional Capital

✅ Correct Option: 3

Under the Fixed Capital Method, two separate accounts are maintained for each partner:

Capital Account → Records only permanent changes in capital

Current Account → Records all temporary transactions

The Capital Account under Fixed Capital Method includes:

Opening Balance of Capital (credit side)
Additional Capital introduced (credit side)
Permanent Withdrawal from capital (debit side)

Since the capital needs to remain fixed, all routine transactions that don't permanently alter the capital are recorded in the Current Account instead.

Drawings represent the amount of cash or goods withdrawn by a partner for personal use. This is a temporary/routine transaction that doesn't permanently change the partner's capital. Therefore, drawings are recorded in the Current Account, not the Capital Account.

The distinction is crucial: If drawings were recorded in the Capital Account, the capital balance would keep changing, defeating the purpose of the Fixed Capital Method where capital should remain constant unless there's a permanent change (like additional investment or permanent withdrawal).

Hence, Drawings is not a part of the Capital Account under Fixed Capital Method.

2026: 21 May Shift 1

Under fluctuating capital method,

(A) Only one account, i.e., a capital account is maintained for each partner

(B) All the adjustments such as share of profit and loss, interest on capital, drawings, interest on drawings, salary or commission to partners, etc. are recorded directly in the current accounts of the partners.

(C) All the adjustments such as share of profit and loss, interest on capital, drawings, interest on drawings, salary or commission to partners, etc. are recorded directly in the capital accounts of the partners.

(D) This makes the balance in the capital account fluctuate from time to time.

Choose the correct answer from the options given below:

2026: 12 May Shift 1

The clauses of partnership deed can be altered with the consent of:

2022: 23 Aug Shift 2

Sudhir and Vimal came into partnership with profit sharing ratio of 3 : 2. Due to paucity of time, Sudhir was unable to give time to business so Vimal acted as principle and took all financial and operational decisions.

Due to break down of Covid 19, business suffered a loss of 4,00,000. State the amount of loss to be borne by Sudhir.

2025: 30 May Shift 2

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

2026: 13 May Shift 2

Nimrat, Simrat and Harjeet are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides for charging interest on drawings @ 10% p.a. The drawings of Nimrat, Simrat and Harjeet during the year ending March 31, 2025 amounted to Rs. 60,000, Rs. 45,000 and Rs. 30,000 respectively, which were made on 1st April, 2024. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. If the necessary adjustment is made for rectification of this error, then:

2026: 29 May Shift 2

In respect of Accounting of Partnership firm, under fixed capital method, all items like share of profit or loss, interest on capital, drawings, interest on drawings will be recorded in:

Which of the following is not a part of capital account under the fixed Capital Method?

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