Question

Distinguish between ‘Fixed Capital Account’ and ‘Fluctuating Capital Account’ on the basis of credit balance

Answer 1

Basis	Fixed Capital Account	Fluctuating Capital Account
Credit Balance	Fixed Capital Account always shows a credit balance as all the adjustments related to interest on capital, interest on drawings, salary, etc. are made through Partners’ Current Account	Fluctuating capital account can have both debit and credit balances as all the adjustments of interest on capital, interest on drawings, salary, etc. are made through the same account.