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When capital accounts are maintained under the Fixed Capital method, additional capital introduced by a partner is recorded as a:

  1. A
    Credit to current account.
  2. B
    Debit to current account.
  3. C
    Credit to capital account.
  4. D
    Debit 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.

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When capital accounts are maintained under the Fixed Capital method, additional capital introduced by a partner is recorded as a:
A
Credit to current account.
B
Debit to current account.
C
Credit to capital account.
D
Debit to capital account.

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