Question

Where will you record interest on capital when capitals are fluctuating *
on the credit side of partner's current A/c
on the credit side of partner's capital A/c on the debit side of partner's current A/c on the debit side of partner's capital A/c

please answer it fast it's urgent​

Answer 1

Answer:

Where the Capital Accounts are being maintained under "Fluctuating Capital Accounts" method, interest on capital is to be calculated on the balances in the capital accounts as that is the only account that is related to capital.

Explanation:

Answer 2

Answer:

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Explanation:

In case of Fixed Capital method, two accounts are opened for recording the transactions.

1. Capital Account which records the introduction of capital. It remains fixed year after year otherwise than where there is an introduction of new capital and withdrawal of capital.

2. Current Account which records all other adjustments like salary, commission, interest on capital,drawings etc.

So, when the partner's capital are fixed,drawings made by a partner will be recorded in the current account debit side.