Question

outstanding liabilities paid by one of the partner how we can enter it in partners capital account​

Answer 1

Answer:

Explanation:

If any outstanding liability is paid by one of the partner, in that case, it may or may not be entered in Capital Account because of the reason given hereunder:-

1. In case the Capital account of the partners are fixed, In that case the liability paid by one of the partner will be entered in his current account as investment by that partner.

2. In case the Capital Account is not fixed, the payment made by one of the partner for any liability met by him, the amount may be added in his capital account, provided there is not any contrary to the partnership deed.

3. In case there is any provision in the Partnership deed, matting of liability by one of the Partner will be dealt accordingly.

4. It can be treated as loan to the firm, in case there is such agreement.