Question : In the case of fixed capital, interest on capital
Option 1: is credited to the partner's capital account
Option 2: is credited to the partner's current account
Option 3: maybe credited to the partner's capital and current account
Option 4: is debited to the partner's capital account
Correct Answer: is credited to the partner's current account
Solution : Answer = is credited to the partner's current account. If capitals are fixed, then all adjustments, like interest on capital, etc., are transferred to the partner's current account. When handling fixed capital in a partnership firm, the partner's current account is credited with any income or profit, such as interest on capital. This practice accurately registers the partner's interest earnings and assigns them to their current account within the partnership framework. Hence, the correct option is 2.
Question : When a partner pays unrecorded liability is --------------------debited and concerned ------------------------is credited.
Question : Realization expenses of Rs. 5,000 were to be borne by Pavit, a partner. However, it was paid by Hitesh, another partner. It was to be recorded in the books. The entry will be
Question : Choose the correct Journal entry with respect to loan by Amit (Partner) for the following cases at the time of the firm's dissolution: The loan by Amit (Partner) is Rs. 50,000 and the Balance in his Capital Account (credit) is Rs. 25,000.
Question : P, R and A are partners sharing profit and losses in the ratio of 1:1:1. A retired on 1st April, 2021. P and R decided to continue the business share profit in the ratio of 3: 2. They also decided to give effect to the change In value of assets and liabilities without changing
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