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Give the word/term or phrase which can substitute the following statement. Under this method capital balances of partner remain constant. - Book Keeping and Accountancy

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Question

Give the word/term or phrase which can substitute the following statement.

Under this method capital balances of partner remain constant.

One Word/Term Answer
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Solution

Fixed Capital Method

Explanation: 

Under Fixed Capital Account Method, capital balances of partners remain constant. In this method, a separate account known as Current Account is opened and all transactions related to interest on capital, drawings, remuneration of partners etc are recorded in it.

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Chapter 1: Introduction to Partnership - Exercise 2 [Page 13]
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