Question

The drawings of partners are transferred to ________ account. (Fill in the blank by choosing correct option)
a) trading
b) profit and loss
c) partner's capital
d) balance sheet

Answer 1

IN FINAL ACCOUNT TRANSFER TO TRADING ACCOUNT

IN
RECONSTITUTION

IT TRANSFER TO PARTNER CAPITAL AC

Answer 2

The drawings of partners are transferred to partner's capital account.

• The partnership capital account is an equity account in a partnership's accounting records.
• A partnership can hold a single partner capital account for all partners, with a supporting schedule breaking down each partner's capital account. Instead, it is easier to keep separate capital accounts for each partner within the accounting system over the long term.
• It is easier to determine the amount to be assigned to each partner in the event of the liquidation of the company or the exit of the partner, thus reducing the amount of dispute between the partners on compensation and liabilities.