Question

What do you understand by fixed capitals and fluctuating capital of partners?

Answer 1

The capitals of the partners shall remain fixed unless additional capital is introduced or a part of the capital is withdrawn. All items like share of profit or loss, interest on capital, drawings, interest on drawings, etc. are recorded in Partner's Current Account

Answer 2

Fluctuating Capital Definition: A partnership term. When the capitals of partners are fluctuating, all adjustments with regards to the interest on capitals, interest on drawings, partners salaries etc. are passed through the capital accounts of the partners.