1) How do we know that the capital is fluctuating or fixed in questions? . 2) and when to write current A/C and capital A/C in journal entry in change in PSR after finding the sacrificing ratio?
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see if there is fixed capital in question then it'll came to know in two ways :-
- either it will be specified in question
- or you've given balance sheet and in balance sheet drawings will be given in asset side (it mean that they've not been deducted from partners capital)
- if nothing specified then it'll be assumed fluctuating capital
2. if the partners maintain fixed capital then in every profit distribution you'll have to open current accounts to keep the capital accounts unaffected
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