Question

The balance of capital account remains constant under fixed capital method. (State True or False)

Answer 1

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Your Answer:-

Yes, the balance of capital account remains constant and fixed capital method.

Hence, it is true.


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Answer 2

The given statement is true.

Explanation:

• In this given question the answer is true due to the fact that capital accounts are usually constant under the fixed capital method because capital account balance usually does not change from year to year.
• Only time capital changes in the fixed capital method of accounting is when there is New Capital that is introduced in the middle of the year on the next year or when the partner withdraws capital.
• But keep this in mind the balance of current accounts does not change when the capital is taken by the partner.

TO KNOW MORE:

What is capital account

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Explain component of current account and capital account​

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