Capital Accounts

The closing balance lies on the side with the larger total. Here debit total = Rs 63,000 and credit total = Rs 56,000. Difference = Rs 63,000 − Rs 56,000 = Rs 7,000; since debits exceed credits, the balance is Rs 7,000 debit. Option B is wrong because it reverses the sign (credit instead of debit). Option C stems from an incorrect operation (adding totals). Option D is wrong because a nil balance would require equal totals. Exam tip: subtract the smaller total from the larger and state which side (debit/credit) is larger.

To get a credit balance total credits must exceed debits by Rs 9000. Total credits are Rs 51000.

Debit balance means debit items exceed credits by Rs 13000. Therefore total debits are Rs 88000.

Calculate time weighted average. Total capital months are Rs 1080000 and dividing by twelve gives Rs 90000.

The direct answer is Rs 9,000, so option A is correct. A partner’s capital account is credited when the partner brings an asset into the business. The amount credited should be Rs 45,000, but the books show Rs 54,000. The excess credit is found by subtraction: Rs 54,000 − Rs 45,000 = Rs 9,000. Since a credit increases the capital balance, the capital is shown Rs 9,000 too high. Option A, Rs 9,000, is correct because it is exactly the excess recorded. Option B, Rs 45,000, is the correct amount of the asset, not the overstatement. Option C, Rs 54,000, is the amount actually recorded, not the extra amount. Option D, Rs 99,000, incorrectly adds the two figures instead of finding their difference. Remember: for an overstatement, subtract the correct figure from the recorded figure.

Return of capital reduces capital account while normal drawings affect current account. The error misclassifies both partner accounts.

If salary is paid in cash the liability may be settled. Extra credit in current account overstates partners claim.

Salary due increases partners claim. If not paid in cash it is credited to the partners account.

Capital adjustment is correct only when real capital of each partner is known. Therefore current accounts are first transferred to capital.

Wrong side or missing second effect is the most common error. Matching debit credit and the second account makes the answer reliable.