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Question
Answer in one sentence only.
What is the Fixed Capital Method?
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Solution
When capital accounts of the partners are maintained under fixed capital method, then the capital of the partners remains unchanged or unaltered. It alters only in case of permanent change in capital (i.e. additional capital introduced or withdrawal of capital). In this method, two accounts, namely, Capital Account and Current Account are prepared.
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Chapter 1: Introduction to Partnership and Partnership Final Accounts - Exercise 1.1 (Objective Questions) [Page 52]
