Identify the correct statement regarding a Partner's Current Account:
- APartners' Current Account will never be shown in Assets side of the Balance Sheet.
- BPartners' Current Account will either be shown in Assets side of the Balance Sheet or be shown in Liabilities side of the Balance Sheet.
- CPartners' Current Account will always be shown in Liabilities side of the Balance Sheet.
- DPartners' Current Account will always be shown in Assets side of the Balance Sheet.
Solution & Step-by-step Explanation
A partner's current account can have either a credit or a debit balance. A credit balance indicates that the firm owes money to the partner, and it is reported under the Liabilities side. A debit balance indicates that the partner has overdrawn or owes money to the firm, and it is reported under the Assets side.