Under the fixed capital method of a partnership concern, which two accounts are maintained for each partner?
- ACapital account and Balance sheet
- BCurrent account and Balance sheet
- CCapital account and Current account
- DRevaluation and Capital account
Solution & Step-by-step Explanation
When capitals are fixed, the capital account balance remains unchanged unless additional capital is introduced or a permanent withdrawal of capital is made. All regular transactions such as interest on capital, drawings, salary, and share of profit/losses are recorded in a separate account called the Current Account.Thus, a Capital Account and a Current Account are maintained for each partner.