Question

Current Account of partners are maintained if
(a) Capitals are fluctuating
(b) Capitals are fixed
(c) Whether capitals are fixed or fluctuating
(d) As is decided by the partners

Answer 1

Answer:

capital are fluctuating.

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Answer 2

We are asked when the current account of the partners will be maintained for which we are provided with four options. The correct option that will be chosen will be (b) when capitals are fixed.

• The two types of capital accounts that can be kept by partners are fixed and fluctuating.
• Under a fixed account, the capital of the partners will be kept constant and all other transactions will be carried out in the current account.
• The other transactions will include interest on drawing, interest on capital, salary, commission, etc.
• Under a fluctuating capital account, all the above transactions can be noted down in this account only.
• It is very necessary for the partners to abide by the rules of partnership and this cannot be decided by them.
• So, from the above, it is evident that the current account will be maintained only when the capital is fixed.
• Therefore, option (b) capitals are fixed will be the correct answer.

PROJECT CODE: #SPJ2

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