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Distinguish between fixed capital account and …

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Distinguish between fixed capital account and fluctuating capital account

    • Posted by Divya Khadka 6 years, 10 months ago

    CBSE > Class 12 > Accountancy
    • 1 answers

    Gaurav Seth 6 years, 10 months ago

    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Points</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Fixed Capital Method</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Fluctuating Capital Method</div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">1.Number of Accounts</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Two accounts, viz., capital and current account.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">One account, viz., capital account.</div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">2. Nature of Account / Balance</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Remains unaltered</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Fluctuates.</div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">3. Adjustments</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Adjustments like interest on capital, drawings, interest on drawings, etc. are made in the current accounts.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Adjustments are made in the capital account itself.</div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">4. Appearance in the balance sheet</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Both capital and current accounts appear.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Only capital account appears .</div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">5. Specific mention</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">It should be specifically mentioned in the partnership deed.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Not necessary.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt"> </div>
    <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">6. Credit / Debit balance</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Fixed capital accounts always shows a credit balance.</div> <div style="margin-bottom:0.0001pt; text-align:justify; padding:0in 5.4pt">Fluctuating capital may some times show a debit balance.</div>

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