Capital Accounts

When withdrawal is not allowed highest capital may be used as base and other partners bring deficiency. Read the condition in exams.

Bs one part is Rs 120000 so As two parts should be Rs 240000. A has Rs 200000 so he must bring Rs 40000.

The direct answer is A: yes, the capitals are already in the ratio 3:2. Start by writing the capital ratio as 150000:100000. Divide both terms by 50000: 150000 ÷ 50000 = 3 and 100000 ÷ 50000 = 2. Therefore the ratio is 3:2, exactly the same as the profit-sharing ratio. No partner has to bring or withdraw money. Option A is correct because it states this exact result. Option B is wrong because 150000:100000 does not simplify to 2:3; that would reverse the partners. Option C is wrong because the capitals are not equal: A has 50000 more than B. Option D is wrong because A does not need to bring 50000; the existing capitals already match the required ratio. Remember: simplify the capital ratio before deciding on adjustment.

Both items are related to recovery from partner or withdrawal. Therefore they appear on debit side of current account.

Salary, commission and interest on capital are appropriations of profit payable to the partner; they increase the partner's claim and are therefore credited in the partner's current account when preparing the closing balance. Why other options are wrong: "All three debit" is incorrect because debit implies liability of the partner to the firm, which is not the case here; "Only salary debit" and "Only interest debit" are incorrect because both items are amounts payable to the partner and so are credited. Exam tip: Memorize the rule — items payable to a partner (salary, commission, interest on capital) are credited to the current account; drawings are debited.

Both items are payable to partner. Debit in appropriation account and credit in partners account complete double effect.

Interest on drawings is recoverable from partner. Therefore it is debited in partners account and credited in appropriation account.

Goods withdrawn are generally recorded at cost when no different instruction is given. In exams follow the question instruction first.

Capital account shows capital and related adjustments. A temporary advance is clearer when shown separately.

Capital and a loan from a partner are different in nature. Capital represents the partner’s permanent stake (partners’ funds) while a loan is a liability of the firm with its own terms (interest, repayment schedule). Accounting practice requires separate ledger accounts and separate presentation on the balance sheet — capital under partners’ funds and the loan under liabilities (current or long‑term as applicable). Options B and C are wrong because a loan does not automatically merge into or get cancelled by capital unless there is an explicit agreement (for example, conversion of loan into capital). Option D is incorrect in usual practice: drawings are withdrawals by a partner and reduce capital, but an agreed loan taken by the firm should be treated as a liability, not as drawings. Exam tip: always verify the contractual terms — only a written agreement can convert or set off a loan against capital; otherwise present them separately.

Debit current balance is recoverable from partner. Adjusting it against capital reduces capital claim so capital account is debited.

The direct answer is A: the new capital is Rs 75000 credit. A credit capital balance of Rs 90000 is a claim in favour of the partner. A debit current-account balance of Rs 15000 reduces that claim when the accounts are combined. Calculation: Rs 90000 credit − Rs 15000 debit = Rs 75000 credit. Option A is correct. Option B, Rs 105000 credit, would incorrectly add the debit balance instead of subtracting it. Option C is wrong because Rs 15000 debit is only the current-account balance, not the final combined capital. Option D is wrong because it ignores the debit current account and simply repeats the old capital balance. In accounting, credit and debit balances in the same partner’s accounts are netted: a credit increases the net amount and a debit decreases it. Memory cue: debit current account means deduction from capital claim.

Credit current balance increases partners claim. After merging it into capital new capital will be Rs 100000 credit.

A debit balance is balanced by writing Balance carried down on credit side. Next year it becomes debit balance brought down.

Accounts change according to fixed or fluctuating method. Then separating credit and debit items reduces mistakes.

Deduct the debit current balance from capital to get Rs 182000 and add the separate loan to get Rs 212000. Identify loan and capital separately.

Add credit items and deduct debit items. Rs 140000 plus Rs 75000 minus Rs 24200 equals Rs 190800.

The correct answer is option A, nil balance. A current account records items that increase or decrease a partner's balance after the capital account has been considered. A credit balance of Rs 12,000 is the opening credit. Commission of Rs 8,000 is also a credit, so total credits are Rs 20,000. The loss share of Rs 10,000 is a debit, drawings of Rs 9,000 are a debit, and interest on drawings of Rs 1,000 is another debit. Total debits are Rs 10,000 + Rs 9,000 + Rs 1,000 = Rs 20,000. Since credits equal debits, the closing balance is zero. Option B is wrong because there is no excess credit of Rs 20,000; that amount is the total credit, not the closing balance. Option C is wrong because debits do not exceed credits. Option D is wrong because the figures do not leave a Rs 10,000 debit. The exam rule is: add each side separately, then compare the totals.

Interest is on Rs 60000 for full year and Rs 30000 for seven months. Total interest is Rs 7200 plus Rs 2100 equal to Rs 9300.

Interest is on Rs 100000 for eight months and Rs 60000 for four months. Total interest is Rs 6000 plus Rs 1800 equal to Rs 7800.

Total claim is Rs 30000 and As share is three fifths. Three fifths of available profit Rs 24000 is Rs 14400.

Total interest claim is Rs 30000 and Cs claim is half. Therefore C receives half of the available profit which is Rs 10000.

For monthly drawings at the beginning average period is six and half months. Interest on Rs 60000 at ten percent for six and half months is Rs 3250.

For monthly drawings at the end average period is five and half months. Interest on Rs 30000 at twelve percent for five and half months is Rs 1650.

For quarterly drawings in the middle average period is taken as six months. Interest on Rs 24000 at ten percent for six months is Rs 1200.