Question

Method of capital account in which capital balances of partners changes every year. Answer in a word / phrase / term.

Answer 1

Fluctuating capital methods..

Answer 2

Explanation:

Method of capital account in which capital balances of partners changes every year is the fluctuating capital method.

A term for a partnership. When the partners ' capital is fluctuating, all modifications are carried through the partners ' capital accounts with respect to interest on capital, drawings, partner wages, etc.

Under this technique, as the name suggest, each partner's capital continues to change from moment to time. All modifications resulting in a reduction in capital will be debited to the partner's assets, such as drawings by each partner, the interest on the drawings and the loss share.