Question

State whether the following statement is True or False with reasons.

Adjustments are recorded in Partner's Current Account in Fixed Capital Method.

Options

• True 

• False

Answer 1

Adjustments are recorded in Partner's Current Account in Fixed Capital Method. - True

Explanation:

In the Fixed Capital Method, as the name suggests capital balances (opening and closing) are generally remain fixed. Under this method, adjustments are not to be recorded in Capital Account. All adjustments are recorded in a separate account called Partners’ Current Accounts.