Which of the following are shown under capital account in case capital of partner's are fixed?(A) Fresh capital introduced(B) Permanent capital withdrawn(C) Interest on capital(D) Amount of capital brought down from the previous yearChoose the correct answer from the options given below:
- A(A), (B) and (C) only
- B(A), (B) and (D) only
- C(A), (C), and (D) only
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
Under the Fixed Capital Method, two accounts are maintained for each partner: Partner's Capital Account and Partner's Current Account.The Partner's Capital Account records only the opening balance ((D) capital brought down), additional capital introduced ((A) fresh capital), and permanent withdrawal of capital ((B) capital withdrawn).All other periodic adjustments such as interest on capital (C), drawings, interest on drawings, salary, share of profit/loss are transferred to the Partner's Current Account.Therefore, (A), (B), and (D) are recorded in the capital account.