Question

When the partners’ capitals are fixed, the drawings made by a partner are recorded on the ______.

Options

• Debit side of Partner’s Capital Account.

• Credit side of Partner’s Capital Account.

• Debit side of Partner’s Current Account.

• Credit side of Partner’s Current Account.

Answer 1

When the partners’ capitals are fixed, the drawings made by a partner are recorded on the debit side of the partner’s current account.

Explanation:

Under the Fixed Capital Method, the Partner’s Capital Account remains constant and only records the initial capital contribution. To maintain this stability, a separate Partner’s Current Account is opened to handle all regular adjustments.