Maharashtra State BoardHSC Commerce 12th Board Exam
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State whether the following statement is True or False with reason. The debit balance of insolvent partner’s Capital Account is known as a capital deficiency. - Book Keeping and Accountancy

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MCQ
True or False

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

The debit balance of insolvent partner’s Capital Account is known as a capital deficiency.

Options

  • True

  • False

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Solution

This statement is True.

Debit balance of Partners’ Capital Account means an excess of drawings than the capital credit balance. In the case of an insolvent partner, the debit balance of Capital Account means liabilities which he cannot pay. It means capital deficiency.

Concept: Dissolution of Partnership Firm
  Is there an error in this question or solution?

APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 6 Dissolution of Partnership Firm
Exercise | Q 6 | Page 181
Balbharati Book-keeping and Accountancy 12th Standard HSC Maharashtra State Board
Chapter 6 Dissolution of Partnership Firm
Exercise 6 (Objective Questions) | Q 1. C) 6) | Page 242
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