When capital accounts are maintained under the Fixed Capital method, additional capital introduced by a partner is recorded as a:
- ACredit to current account.
- BDebit to current account.
- CCredit to capital account.
- DDebit to capital account.
Solution & Step-by-step Explanation
Under the fixed capital account method, the Partner's Capital Account changes only under two circumstances: the introduction of fresh additional capital or the permanent withdrawal of existing capital. Introducing new cash increases equity, so it must be credited directly to the Partner's Capital Account.