Accounting for Partnership Firms – Fundamentals · Class 12 · CBSE · Commerce Accountancy
Under the fluctuating capital method, where is the share of profit of a partner recorded?
Practice question from Accounting for Partnership Firms – Fundamentals (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-42D379
Under the fluctuating capital method, where is the share of profit of a partner recorded?
- A.Debit side of Partner's Current Account
- B.Credit side of Partner's Capital AccountCorrect answer
- C.Debit side of Profit and Loss Account
- D.Credit side of Partner's Current Account
Solution
Under the fluctuating capital method, all transactions relating to a partner (such as interest on capital, salary, share of profit, drawings, etc.) are recorded directly in the partner's Capital Account. The share of profit is credited to the Capital Account.
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