Which of the following are shown under the capital account in case the partners' capitals are fixed?(A) Fresh capital introduced(B) Permanent capital withdrawn(C) Interest on capital(D) Amount of capital brought down from the previous yearChoose the correct answer from the options given below: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: Capital Account and Current Account.The Partner's Capital Account records only the opening balance (D), fresh capital introduced (A), and permanent withdrawal/drawings against capital (B).Items like interest on capital (C), interest on drawings, salary, and profit share are recorded in the Partner's Current Account.Therefore, (A), (B), and (D) are recorded in the Capital Account.